KARACHI: Pakistan's business confidence score plunged by 21 percent across different sectors of the economy in the last six months, the Overseas Investors Chamber of Commerce and Industry (OICCI) said in its Business Confidence Index Survey (Wave-22) on Wednesday.
The BCI survey shows comprehensive feedback from frontline business stakeholders in respect of their views on the environment and opportunities impacting their respective business operations.
The feedback covers business environment at regional, national, sectorial and own business entity levels in the past six months as well as the anticipated business and investment environment in the next six months.
The Wave-22 survey, which was conducted across Pakistan in September and October, said the country's overall business confidence score (BCS) dropped to -4 percent from the previous score of 17 percent recorded in Wave-21 held in March-April.
“The substantial decline in the overall Business Confidence to negative 4 percent is regrettable but not surprising considering the highly challenging political and economic situation during the past six months,” OICCI President Ghias Khan observed in the survey report.
"Besides very high inflation and increased fuel prices, the significant currency devaluation also dampened the economic activity. The record level of rains during August leading to severe flooding in Sindh and other parts of the country further restricted the business activities."
The Overseas Investors Chamber of Commerce & Industry (OICCI) serves as the national point of reference for foreign investors in Pakistan.
The survey is done face to face, across the country, covering 80 percent of the GDP, with higher weightage given to key business centers in the country, like Karachi, Lahore, Rawalpindi-Islamabad and Faisalabad.
The highest drop in confidence was recorded in the services sector at 24 percent, retail & wholesale trade at 22 percent, and manufacturing sector at 20 percent.
The survey sample consisted of 42 percent respondents from manufacturing sector, 33 percent from services sector and 25 percent from the retail & wholesale trade, according to the report.
Despite recording a significant drop in confidence, the manufacturing sector recorded a net confidence level of positive 3 percent, whereas services and retail sector stood at negative of 8 percent and 14 percent respectively.
“These are challenging times and the authorities are doing all they can to navigate the enormous challenges in front including managing inflation, restricted availability of foreign exchange and resource constraints,” OICCI Vice-president Amir Paracha said.
“Key stakeholders especially foreign investors will continue to support the authorities in taking long term policy measures to streamline the economic fundamentals including fair taxation for all and facilitate business and investment in the country.”
The sentiments of OICCI members, or the leading foreign investors, who were randomly included in the survey, stood at 6 percent, substantially lower than the 33 percent in the previous wave survey.
“Foreign investors feedback could have been more positive but for serious concerns on few critical issues like the undue delay in revising the pharma pricing and the extreme delays in overseas remittances for goods, services and dividends. Such actions are seriously counterproductive for attracting FDI in the country,” Khan said.
"The three major threats to business growth identified in the survey are Inflation (78 percent), High Taxation (71 percent), and currency devaluation (70 percent) which could potentially slow down business growth in Pakistan."
