While Pakistan’s business sentiment has seen a significant upswing, a new survey from the Overseas Investors Chamber of Commerce and Industry (OICCI) revealed today that persistent challenges, including taxation, inflation, and inconsistent government policies, remain the foremost threats to sustained economic growth.
The OICCI”s Business Confidence Index (BCI) – Wave 28 registered a substantial 11 percentage-point improvement, pushing the overall confidence level into positive territory at +22 percent. The survey encompasses businesses that represent nearly 80 percent of the nation”s GDP.
A standout finding in the report is the performance of the services sector, which recorded a record 24 percent uplift in confidence, its highest sectoral score since 2017. The retail sector also demonstrated a strong recovery with a 15 percent improvement, while the manufacturing sector saw a more modest 1 percent increase.
The revival in business optimism appears to be broad-based geographically. Confidence in metro cities climbed from 14 percent to 23 percent, and a notable turnaround was observed in non-metro locations, which shifted from a negative 3 percent to a positive 19 percent.
Forward-looking indicators also point towards strengthening momentum. The New Orders (Expansion) Index rose sharply to 41 percent from 26 percent in the previous survey wave. Similarly, hiring expectations improved, with the New Jobs Index increasing to 16 percent from 13 percent, largely driven by a 21-point surge in services sector hiring plans.
Investment sentiment experienced a marked reversal, with the New Investment Index improving from a negative 4 percent to a positive 12 percent, propelled by strong rebounds in both the services and manufacturing sectors.
OICCI President Yousaf Hussain described the findings as a reflection of a “cautiously improving business climate” following a turbulent economic period. “The results of Wave 28 point to a constructive shift in business sentiment… The willingness of businesses to invest and expand is a promising sign for the months ahead,” he stated.
However, OICCI Secretary General and Chief Executive M. Abdul Aleem highlighted areas needing attention. “The manufacturing sector’s marginal rise highlights the need for focused efforts to support industrial competitiveness and cost stability,” he noted, adding that sustaining the upward trend requires addressing structural issues.
The report also sheds light on technological adoption, revealing that 43 percent of OICCI members are already using generative AI technologies, and 81 percent anticipate AI will take over key business functions in the near future.
Despite the positive outlook, the survey respondents identified rupee devaluation, corruption, and the previously mentioned concerns over taxation and unpredictable policies as key impediments to business growth.