Business Confidence Index Improves Significantly

Pakistan’s business sentiment has taken a turn for the better, according to the latest Business Confidence Index (BCI) survey by the Overseas Investors Chamber of Commerce and Industry (OICCI). Conducted during October-November 2024, the survey reveals a 9% improvement, bringing the index to -5% from the -14% reported earlier this year.

Key Factors Behind the Shift

The OICCI attributes this positive change to:

1. Economic Growth Momentum: Improved GDP figures have injected optimism into the market.
2. Exchange Rate Stability: A steady rupee has offered relief to businesses grappling with volatility.
3. Easing Inflation: Lower inflation has positively impacted both consumer spending and operational costs.

Sectoral Performance Overview

• Services Sector: Showed the most notable improvement, highlighting increased investment and robust demand.
• Manufacturing Sector: Rebounded significantly, with the confidence index improving from -15% to -3%.
• Retail and Wholesale Sector: Registered a decline, with the index falling to -18%, underlining challenges in consumer spending and logistics.

A Timeline of Recovery

In its earlier March-April 2024 survey, OICCI noted a modest 4% increase in the BCI, which stood at -14% then. This incremental progress has since accelerated, reflecting the effects of policy reforms and economic stabilization efforts.

A Mixed Outlook

While the overall improvement in business confidence is a positive sign, certain sectors, like retail and wholesale, continue to face hurdles. Persistent challenges, including global market fluctuations and domestic political uncertainty, remain potential roadblocks to sustained recovery.