Ongoing political uncertainty as well as deteriorating economic indicators have dented overall Business Confidence in Pakistan, which stood at a negative 4% in November 2022, a decrease from the positive 17% announced in May 2022, showed survey results by the Overseas Investors Chamber of Commerce and Industry (OICCI) released on Wednesday.

As per OICCI’s 'Business Confidence Index Survey Wave 22' (conducted during Sept-Nov 2022), the substantial decline in overall Business Confidence is "not surprising considering the highly challenging political and economic situation during the past six months, both in the country and uncertainty in the region due to the ongoing Ukraine war".

“Besides very high inflation and increased fuel prices, significant currency devaluation also dampened economic activity,” said the report.

Moreover, record level of rains during August leading to severe flooding in Sindh and other parts of the country also impacted business activities, it added.

Survey: businesspeople pessimistic about prospects

The OICCI survey sample consisted of 42% respondents from the manufacturing sector, 33% from the services sector and 25% from the retail / wholesale trade.

“The highest drop in confidence was recorded in the services sector, followed by retail & wholesale trade, and manufacturing sector.”

The survey results showed that 73% of respondents had a negative outlook of Pakistan’s business situation in the past 6 months due to political instability, PKR devaluation, increase in fuel and electricity cost, and ineffective commercial and trade policies. “Around half of these respondents feel similar conditions will persist in the next 6 months,” said the report.

Meanwhile, only 17% of respondents had a positive outlook about Pakistan’s overall business situation due to proactive government policies, economic growth, and improved law and order situation.