KARACHI: In what can be termed as a positive omen for the country’s economy, the Overseas Investors Chamber of Commerce and Industry (OICCI) on Wednesday said that the business confidence in Pakistan has improved by 17% during the last six months.
The results are part of a countrywide Business Confidence Index (BCI) survey, conducted by the chamber – an umbrella organisation that represents over 190 multinationals operating in Pakistan.
At 18%, the overall BCI score showed a marked improvement as compared previous results announced in October 2014, when the BCI was only 1%.
The most notable feature was that the improvement was recorded in all sectors as compared to the previous survey, with the retail sector leading this significant shift growing 26%.
The services sector followed closely with 31%, a net increase in BCI of 24% (7% to 31%), while the manufacturing industry went from 5% to 11%.
Meanwhile, business confidence has cumulatively gone up in the last six months, as overall confidence level of leading foreign investors outperformed the general trend, with OICCI members score going up to 48% from 16%, a 32% increase in positive sentiment.
The significant upsurge in business confidence is due to a combination of various factors: The decline in global oil prices and inflation that is at an 11-year low, followed by a cut in discount rate by 2% since October 2014.
The political environment also stabilised during the period and expectations of large Chinese investments for development of the Pak-China Economic Corridor also helped the overall outlook.
Looking ahead, survey respondents have expressed high levels of optimism for the next six months which is four times higher than a similar outlook during the previous survey and 43% expect an increase in operations.
Commenting on the results, OICCI President Atif Bajwa, said the survey results are the best ever recorded since the chamber launched BCI surveys in April 2010.
However, Bajwa added that this positivity should encourage the government to focus on actions to address issues which are negatively impacting ‘ease of doing business’ and good governance, so that the current low level of Foreign Direct Investment (FDI) is substantially increased.