Pakistan’s Economy Roars Back to Life as Business Confidence Soars 9% in Just 6 Months

Karachi (Daily Pakistan Online) Pakistan’s business community has expressed cautious optimism about the country’s economic outlook, despite ongoing challenges. The Overseas Investors Chamber of Commerce and Industry (OICCI) unveiled the results of its Business Confidence Index (BCI) Survey – Wave 26, which showed a significant 9% improvement in overall business confidence.

The survey, conducted across Pakistan in October and November 2024, found that business confidence improved from negative 14% to negative 5% compared to the previous wave conducted in March-April 2024. The improvement in business sentiment is driven by positive economic growth, a stable exchange rate, and a notable decline in reported inflation.

The Services Sector led the recovery, improving from negative 14% to positive 2%, followed by the Manufacturing Sector, which rose from negative 15% to negative 3%. However, the Retail/Wholesale Sector registered a decline, dropping from negative 15% to negative 18%.

According to Yousaf Hussain, President OICCI, the improvement in the Business Confidence Index reflects an overall improvement in the economic outlook and the resilience of Pakistan’s business environment amidst ongoing challenges. Hussain attributed the positive trend to the government’s bold confidence-building measures, including compliance with the IMF’s Extended Fund Facility (EFF), which has led to an improved country risk rating and a boost in foreign exchange reserves.

However, Hussain also emphasized that challenges such as increasing energy costs, high taxation, and policy inconsistency need to be proactively managed through deeper engagement between policymakers and the industry. This, he said, would enable the country to further improve business confidence, attract local and foreign investment, and ultimately boost job creation.

The survey also highlighted optimism for the next six months, with 43% of respondents expressing positive expectations, up from 34% in the previous wave. Key contributors to this positive outlook include growth in the global market, better government policies, declining inflation, improved law-and-order conditions, and economic growth.

M. Abdul Aleem, Secretary General OICCI, noted that despite notable improvement on the overall BCI, new investment plans remain a concern, with a negative 23% reading compared to negative 12% in the previous wave. Aleem emphasized that actionable measures are needed to sustain the momentum and facilitate all segments of the economy through consistent, transparent policy frameworks focused on ease of doing business.