KARACHI: Pakistan’s business sentiment has improved sharply, yet key economic concerns continue to weigh on investors, according to the Business Confidence Survey Wave 28 released by the Overseas Investors Chamber of Commerce and Industry (OICCI).
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Despite the upbeat indicators, respondents flagged taxation, inflation, rupee devaluation, corruption and policy inconsistencies as the most persistent threats. The survey noted that these issues remain significant barriers to sustained business growth.
The latest findings show an 11-point rise in the Business Confidence Index (BCI), pushing overall confidence to 22 per cent. Businesses surveyed represent nearly 80 per cent of Pakistan’s GDP, giving the assessment considerable significance. The report also reveals a strong shift towards innovation, with 43 per cent of OICCI members already integrating generative AI and 81 per cent expecting AI to take over major business functions soon.
A notable highlight is the services sector, which posted its highest score since 2017 with a record 24 per cent uplift. The retail sector followed with a 15 per cent rise, while manufacturing remained flat, increasing by only one per cent. Metro cities saw confidence climb from 14 per cent to 23 per cent, and non-metro areas improved from minus 3 per cent to 19 per cent, indicating a broad-based recovery across regions.
However, the manufacturing sector’s minimal improvement underscores the need for targeted policies that enhance industrial competitiveness and stabilise costs. Analysts suggest that sustained growth will require addressing long-standing structural issues that hinder productivity and expansion.
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OICCI members showed a notable jump in sentiment, rising from 17 per cent to 27 per cent as companies anticipate investment and operational growth ahead. Forward-looking indicators also improved, with the New Orders Index surging to 41 per cent from 26 per cent. Hiring expectations strengthened, and the New Investment Index rebounded from minus 4 per cent to plus 12 per cent, signalling growing optimism for the next six months.