• Manufacturing sector leads recovery, followed by retail and wholesale sectors, survey shows
• Respondents highlight inflation, taxation, inconsistent policies, rupee devaluation as key threats
ISLAMABAD: The latest survey conducted by the Overseas Investors Chamber of Commerce and Industry (OICCI) has shown marked improvement in business confidence over the country’s economic and business outlook.
The OICCI released the results of its Business Confidence Index (BCI) Wave 27 survey that depicted a significant improvement in the overall business confidence, which improved by 16 percentage points to positive 11 per cent from negative 5pc in the previous wave conducted in October-November 2024.
This is the first time in nearly three years that business confidence has entered positive territory. The last time the index was in the green was in May 2022, when it stood at 17pc. Since then, it had remained negative, registering -4pc, -25pc, -18pc, -14pc, and -5pc in subsequent waves.
The survey was conducted by the US firm AC Nielsen across Pakistan in March and April 2025, before the period of a recent standoff with India. The positive shift in sentiment across various sectors of the economy can largely be attributed to macroeconomic stability, declining inflation, and anticipated improvements in business conditions over the next six months.
The manufacturing sector led the recovery in the overall business confidence, improving from negative 3pc to positive 15pc, followed by the retail/wholesale sectors, which rose from negative 18pc in the previous Wave 26 to positive 2pc in the latest survey, showing an overall improvement of 20pc. The services sector maintained a steady outlook and jumped from 2pc to 10pc positive in Wave 27, an overall improvement of 12pc.
“The uptick in business confidence is a clear sign that our economic direction is on the right track,” said Finance Minister Muhammad Aurangzeb, who was given a briefing on the latest survey, on Thursday.
“We are focused on creating a conducive environment for investment, supporting private sector growth, and ensuring long-term macroeconomic resilience. The improved sentiment among businesses is both encouraging and a validation of our collective efforts,” he said.
Speaking at a news conference, OICCI President Yousaf Hussain said overall business confidence had shown a notable improvement over the past two years across the business community.
“This sharp recovery in the Business Confidence in the latest Wave 27 reflects the resilience of Pakistan’s business sector and its readiness to seize emerging growth opportunities”, he said, adding that it was heartening to see positive momentum across key sectors, which reflects improved sentiment and growing trust in the country’s economic direction.
He called for greater policy consistency, transparency and active engagement with the key stakeholders including OICCI members to maintain this growing positivity in the business confidence.
The BCI Wave 27 survey revealed increased optimism for the next six months, with 45pc of the respondents expressing positive expectations. Key contributors to this positive outlook include economic growth, improved government policies, investment climate and security situation, said OICCI Chief Executive Abdul Aleem.
Despite the positive trend, 53pc of the survey respondents reported a negative outlook on business conditions over the past six months, which is also a substantial improvement from 66pc negative sentiments in Wave 26. The key concerns indicated in the survey related to political stability, rupee-foreign exchange parity, energy and trade policies.
Foreign investors, including randomly selected OICCI members, showed a remarkable increase from positive 6pc to 17pc. This improvement was primarily attributed to a better global business climate, an improved industry environment in Pakistan over the past six months, and expectations of increased capital investment in the coming six months.
Mr Aleem said the latest survey results were better than anticipated, with positive expectations reflected across all major sectors. Employment prospects, expansion plans and investment expectations demonstrated notable gains, particularly in the manufacturing and retail sectors.
Despite notable improvement on the overall BCI, Mr Aleem said that the new investment plans overall showed an improvement of 19pc, but remained negative, which is an area of concern and needs to be addressed to further accelerate economic growth, energise large-scale manufacturing, trade and export.
Looking ahead, the BCI Wave 27 respondents highlighted inflation, taxation, inconsistent government policies and rupee devaluation as the key threats in order of priority. The top two concerns remain unchanged from the previous wave, indicating ongoing challenges in these areas.
The survey is conducted twice a year and reflects the views of major business stakeholders representing nearly 80pc of Pakistan’s GDP.
The survey covers responses from various sectors, including manufacturing, services, retail and wholesale, and assesses perceptions at regional, national and business entity levels.
Face-to-face interviews are held across major business centres of Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad and Peshawar.
Published in Dawn, May 23rd, 2025
