Pakistan’s business confidence has increased, according to the OICCI poll.

Business confidence has improved by 9% (pc), according to the study, but the overall indicator is still negative at -5 pc. This represents a substantial increase over the -14 percent found in the March and April 2024 poll.

This improvement has been largely attributed to stable exchange rates, solid economic development, and a noticeable drop in inflation. With confidence increasing from -14 percent in the previous survey to +2 percent in the current one, the services sector saw the biggest recovery. The manufacturing sector improved from -15 to -3 percent. Confidence in the retail/wholesale sector, however, fell from -15 to -18 percent.

According to Yusuf Hussain, president of the OICCI, the updated index shows that Pakistan’s business environment is resilient in spite of current difficulties.

He emphasised the government’s audacious efforts to adhere to IMF Extended Fund Facility (EFF) rules, which have boosted foreign exchange reserves, international risk ratings, exchange rate stability, and inflation, all of which have benefited the business climate.

But he also underlined the necessity of improving the way issues like growing expenses—especially in the energy sector—inconsistent policies and greater taxes are managed. Enhanced interaction between the sector and politicians may draw in both domestic and foreign investment, boosting corporate confidence and generating job possibilities.

According to the survey, respondents’ confidence for the upcoming six months has increased, with 43 percent expressing favorable hopes, up from 34 percent in the previous survey. This optimism is mostly fueled by the expansion of the world market, better government policies, lower inflation, increased law and order, and economic advancement.

Although there have been gains, the indicator still shows cautious optimism among firms, according to OICCI Secretary General Muhammad Abdul Aleem. He highlighted that the score for new investment plans remains concerning, with a drop from -12 pc in the previous survey to -23 pc in the current one. Even though 66 percent of respondents said that business circumstances had gotten worse over the last six months, this is better than the 76 percent who said the same thing in the last survey.

Persistent challenges such as high inflation, political instability, rising fuel costs, and ineffective trade policies remain critical concerns. The survey also indicates an increase in foreign investors’ confidence, with their perception rising from -4 pc in the last survey to +6 pc in the current one.

The BCI survey results represent the views of key stakeholders accounting for approximately 80% of Pakistan’s GDP. It covers regional, national, sectoral, and company-level business environments, with 41 percent of respondents from the manufacturing sector, 35 percent from services, and 24 percent from the retail/wholesale sector.

Earlier, Pakistan’s economy showed remarkable improvement, with inflation reaching its lowest level in 3.5 years, according to the Consumer Confidence Index Survey for the fourth quarter of 2024.

According to reports, the survey highlights significant economic progress over the past year, marked by consistent growth in the Pakistan Stock Market (PSX).

The report also noted the establishment of several economic records during the fourth quarter and projected further improvements in the coming months.

It revealed a fourfold increase in the number of citizens who view the country’s economic condition as strong since September 2023. Additionally, 19 percent (pc) of respondents expect further economic improvements within the next six months.

For the first time, Pakistan surpassed Turkey in the global consumer confidence index. Confidence in job security continues to rise, with household purchasing power increasing by six points. Trust in local economic conditions grew by 20%, accompanied by a notable decline in public skepticism.

The IPS Global Consumer Confidence Index, a critical survey that gauges consumers’ economic conditions and investment potential, emphasized Pakistan’s growing economic stability and resilience.