ISLAMABAD: Business confidence in Pakistan has declined significantly, with overall confidence falling from 22% to 13%, while a majority of companies have either delayed or revised their investment plans amid economic and political uncertainty.
According to the latest Business Confidence Index report released by the Overseas Investors Chamber of Commerce and Industry (OICCI), rising inflation, high taxation, regional geopolitical tensions and supply chain concerns have weighed heavily on the business environment.
The report found that between 70% and 80% of businesses have postponed or altered their investment decisions due to uncertainty surrounding the economy and the broader political landscape.
As a result, the country’s new investment index has dropped by 10 points to just 2%, reflecting growing caution among investors.
Inflation was identified as the biggest concern by 84% of respondents, while 79% cited heavy taxation as a major obstacle to business growth. Additionally, 61% of businesses expressed concerns over currency stability and government policies.
The services sector recorded the steepest decline in confidence, falling by 20 points, while confidence in the manufacturing sector decreased by seven points.
In contrast, the retail sector emerged as the only segment to show improvement, with business confidence rising by 20%. Foreign member companies of the chamber also reported stronger sentiment, with confidence improving to 28%. The report noted an increasing trend among these firms toward adopting generative artificial intelligence technologies.
Business confidence in Pakistan’s major cities also weakened, dropping by 12 points to 11%.
The chamber emphasized that policy consistency, economic stability and a predictable business environment are essential to restoring investor confidence and encouraging future investment in Pakistan.
