ISLAMABAD — Business confidence in Pakistan has turned positive for the first time in nearly three years, with the manufacturing and retail sectors leading the recovery, according to the latest Business Confidence Index (BCI) released by the Overseas Investors Chamber of Commerce and Industry (OICCI).
The BCI Wave 27 survey, conducted by AC Nielsen in March–April 2025, showed a 16 percentage point improvement in overall business confidence, rising to +11% from -5% recorded in the previous wave conducted in October–November 2024. This marks the first positive reading since May 2022, when the index stood at 17%.
The manufacturing sector posted the strongest rebound, improving from -3% to +15%, followed by the retail and wholesale sectors, which shifted from -18% to +2%, showing a net gain of 20 points. The services sector also improved modestly from +2% to +10%.
The OICCI attributed the recovery to stabilising macroeconomic conditions, easing inflation, and expectations of improved business prospects over the next six months. The survey was conducted before the recent tensions with India.
Finance Minister Muhammad Aurangzeb, who was briefed on the survey findings, described the improvement as a sign that the government’s economic direction was yielding results. “We are focused on creating a conducive environment for investment, supporting private sector growth, and ensuring long-term macroeconomic resilience,” he said.
OICCI President Yousaf Hussain said the sharp recovery demonstrated the resilience of Pakistan’s business community and reflected rising trust in the country’s economic direction. However, he emphasised the need for greater policy consistency and stakeholder engagement to sustain the momentum.
According to the survey, 45% of respondents expected business conditions to improve in the next six months, citing better policies, a more favourable investment climate, and an improved security environment. While 53% still viewed the last six months negatively, that marked an improvement from 66% in the previous wave.
Foreign investors also reported increased confidence, with their index score rising from +6% to +17%. This shift was linked to improved global and domestic business conditions, along with expectations of increased capital investment.
OICCI CEO Abdul Aleem said the improved confidence was visible across employment plans, investment intentions, and business expansion outlooks — particularly in the manufacturing and retail sectors. However, he cautioned that while new investment plans improved by 19 percentage points, they remained in negative territory, suggesting that further efforts are needed to drive long-term capital formation and industrial growth.
Despite the positive shift in sentiment, the survey also highlighted persistent concerns. Respondents identified inflation, taxation, inconsistent government policies, and rupee devaluation as key threats, with the first two concerns unchanged from the previous wave.
The BCI is conducted biannually and incorporates views from a broad range of businesses, including OICCI members, representing nearly 80% of Pakistan’s GDP. The survey includes face-to-face interviews in major business hubs including Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad and Peshawar.
