OICCI survey finds improved business confidence

KARACHI: Local and foreign investors are bullish and confident on the investment opportunities in Pakistan as they, despite having concerns over policy inconsistency, bet on governance improvement, a survey revealed on Thursday.

The Business Confidence Index survey, conducted by the Overseas Investors Chamber of Commerce and Industry (OICCI) twice a year, found an eight percent improvement in business confidence.

The index that considers various indicators found business sentiments 21 percent positive as compared to 13 percent recorded in the survey in May.

Overseas Investors Chamber of Commerce and Industry President Khalid Mansoor said the current positive business sentiment should not be taken for granted as it is ‘strongly’ co-related with good governance “that needs to be supported by a progressive, transparent, consistent and predictable policy framework.”

Mansoor advised the government to become more proactive and expedite critical interventions on all issues hindering investment and economic activities including foreign direct investment and export. “There is an urgent need to focus on addressing the country’s very poor rating of 147 out of 190 countries in the recently issued World Bank’s 2018 ease of doing business report, down from 144 in 2016 and way below the 75 rating of Pakistan in 2010,” he said in a statement.

The survey is conducted through field interviews in all the four provincial capitals, Islamabad and key business towns across the country. It is a feedback from representatives of all business segments in Pakistan, including retail marketplace, and covers roughly 80 percent gross domestic product.

The Overseas Investors Chamber of Commerce and Industry has 195 members from 35 different countries, representing 14 economic sectors and contributing over one-third of Pakistan’s total tax revenue.

The sentiments of the leading foreign investors, represented by the Overseas Investors Chamber of Commerce and Industry members and who participated in the survey, also recorded a five percent increase to 42 percent.

Retail and wholesale trade sector led an upswing with 40 percent positive sentiment in the survey, up 27 percent in the six months period. The manufacturing sector followed suit with a 16 percent positive sentiments, showing a substantial increase of seven percent, while the service sector with 15 percent recorded a marginal decline of three percent.

Chemical/cement sector grew 41 percent, financial services 30 percent, nonmetallic 23 percent and food sector 21 percent. Transport and communication and automobile sectors registered modest growth rates of 12 percent and seven percent, respectively.

The Overseas Investors Chamber of Commerce and Industry attributed the overall index increase to improvement in global perception and business environment as well as an expected rise in capital investment over the next six months.

“These views of the survey respondents were largely based on improvement in security, law and order and the overall economy, increased consumer demand, better business alliances, decline in the energy crises and decrease in fuel prices and low inflationary pressure on various other products,” it said.