The Overseas Investors Chamber of Commerce and Industry has released the results of its Business Confidence Index Survey Wave 27, conducted across Pakistan during March and April 2025. The findings were unveiled following a high-level engagement between OICCI’s senior leadership and Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb. The latest Business Confidence Index reflects a sharp turnaround in sentiment, improving by 16 percentage points from negative 5 percent in the previous survey to a positive 11 percent.

This improvement marks one of the strongest recoveries in the Business Confidence Index in recent years and signals renewed optimism within Pakistan’s corporate and investment landscape.

Macroeconomic Stability Drives Business Confidence Index Gains

The positive momentum in the Business Confidence Index is largely attributed to improved macroeconomic indicators, including declining inflation, relative currency stability, and expectations of better business conditions over the next six months. Businesses across sectors reported greater predictability in economic management, which has helped restore confidence after a prolonged period of uncertainty.

Anticipated policy continuity and easing cost pressures have played a critical role in strengthening the Business Confidence Index outlook nationwide.

Manufacturing Leads Business Confidence Index Upswing

The Manufacturing sector emerged as the strongest contributor to the improved Business Confidence Index, rising sharply from negative 3 percent in the previous wave to positive 15 percent in Wave 27. This rebound reflects improved demand expectations, better supply chain conditions, and cautious optimism around industrial activity and exports.

The Retail and Wholesale sectors also showed a notable recovery in the Business Confidence Index, improving from a deeply negative 18 percent to a positive 2 percent, supported by easing inflation and gradual recovery in consumer spending.

Services Sector Strengthens Business Confidence Index Momentum

The Services sector maintained a steady upward trajectory in the Business Confidence Index, improving from 2 percent to a healthy 10 percent positive outlook. Growth in telecommunications, logistics, financial services, and professional services contributed to this improvement, reinforcing the sector’s role as a stabilizing force in Pakistan’s economy.

This broad-based recovery highlights that the Business Confidence Index gains are not isolated, but spread across key pillars of economic activity.

Government Response to Rising Business Confidence Index

Finance Minister Muhammad Aurangzeb welcomed the improved Business Confidence Index, describing it as validation of the government’s economic direction. He emphasized the administration’s focus on fostering a conducive investment climate, supporting private sector growth, and strengthening long-term macroeconomic resilience.

According to the Finance Minister, rising business confidence reflects growing trust between policymakers and the business community, a relationship considered essential for sustainable economic recovery.

Related: Overall Business Confidence Under Stress but Remains Higher Than Q4 2024!

OICCI Sees Renewed Trust Behind Business Confidence Index

OICCI President Yousaf Hussain noted that the Business Confidence Index has shown consistent improvement over the past two years, with Wave 27 reflecting a sharp recovery across the business community. He highlighted that the improved sentiment demonstrates resilience within Pakistan’s private sector and readiness to capitalize on emerging growth opportunities.

However, he stressed that sustaining the upward trajectory of the Business Confidence Index would require greater policy consistency, transparency, and continued engagement with stakeholders, including OICCI members and foreign investors.

Future Outlook Lifts Business Confidence Index Expectations

The survey revealed that 45 percent of respondents expressed positive expectations for business conditions over the next six months, significantly strengthening the forward-looking Business Confidence Index. Economic growth prospects, improved government policies, a better investment climate, and enhanced security conditions were cited as key drivers of optimism.

Despite the improvement, 53 percent of respondents reported negative experiences over the past six months, although this marks a substantial improvement from 66 percent in the previous survey, indicating gradual healing across the economy.

Foreign Investors Boost Business Confidence Index

Foreign investors, represented by OICCI member companies randomly selected for the survey, recorded a notable rise in the Business Confidence Index from positive 6 percent to 17 percent. This increase is attributed to a more favorable global business environment, improved domestic industry conditions, and expectations of higher capital investment in the coming months.

The rise in foreign investor confidence is seen as a critical signal for Pakistan’s medium-term growth and capital inflows.

Persistent Risks Temper Business Confidence Index

Despite the positive trend, respondents identified inflation, taxation, inconsistent government policies, and rupee devaluation as the key threats to sustaining the Business Confidence Index. These concerns remain largely unchanged from the previous wave, underscoring the need for structural reforms and policy stability to maintain momentum.

OICCI Secretary General Abdul Aleem noted that while expectations for employment, expansion, and investment improved across major sectors, overall new investment plans remained negative despite a 19 percent improvement, highlighting an area requiring urgent attention.

Business Confidence Index as a National Economic Barometer

Conducted twice annually, the Business Confidence Index survey represents the views of major business stakeholders contributing nearly 80 percent of Pakistan’s GDP. The survey covers Manufacturing, Services, and Retail sectors and gathers insights from leading business centers including Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad, and Peshawar.

The latest Business Confidence Index reinforces cautious optimism, signaling that while challenges persist, Pakistan’s economic trajectory is showing meaningful signs of recovery.