Business Confidence increases despite challenges: OICCI Survey

The Overseas Investors Chamber of Commerce and Industry (OICCI) has unveiled the results of its Business Confidence Index (BCI) Survey – Wave 26, conducted across Pakistan in October and November 2024. The survey reflects improvement in overall business confidence, which improved significantly by 9%, from negative 14% to negative 5% as 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%. Conversely, the Retail/Wholesale Sector registered a decline, dropping from negative 15% to negative 18%.

Commenting on the BCI Wave 26 survey findings, Yousaf Hussain, President OICCI, added, “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. The government has taken bold confidence building measures in compliance with IMF EFF translating into improved country risk rating by international rating agencies, and a boost in FX reserves of the country which helped maintain a stable exchange rate, containing inflationary increase to record lows, all of which collectively led to a positive business environment”. However, OICCI President added, “the challenges of increasing cost especially of energy, high taxation and policy inconsistency need to be proactively managed through deeper engagement of policymakers with the industry. It would certainly enable the country to further improve business confidence, attract local and foreign investment, and ultimately boost job creation in the country”.

The survey 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, further highlighted that, “The BCI Wave 26 feedback reflect cautious optimism among businesses, with significant gains in the services and manufacturing sectors”. Despite notable improvement on the overall BCI, Aleem added, “the new investment plans, overall, were negative 23% vs negative 12 % in the previous BCI 25, which is an area of concern and need to be addressed to boost economic growth and employment.”

The BCI of foreign investors, OICCI members, randomly participating in the survey BCI 26 showed a healthy increase to positive 6 % from negative 4 % in BCI 25, mainly due to improved global business situation and improved industry environment in Pakistan in the past six months.

The OICCI BCI survey is conducted periodically, incorporating feedback from key business stakeholders representing nearly 80% of Pakistan’s GDP. It covers the environment at regional, national, sectoral, and business entity levels. Respondents include 41% from the Manufacturing Sector, 35% from the Services Sector, and 24% from the Retail/Wholesale Sector.

In conclusion, Secretary General OICCI emphasised that while the improvement in business confidence is positive, actionable measures are needed to sustain the momentum. We are positive that all the key stakeholders will thoroughly undertake analysis of the BCI 26 feedback, and take timely measures to facilitate all segment of the economy through consistent, transparent policy framework, focused on ease of doing business so as to accelerate economic growth, investment, boost exports and employment in the country.