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Pakistan’s business confidence score drops to negative 4%

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2 years ago

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  • OICCI conducts Business Confidence Index Survey – Wave 22 from Sept-Oct 2022.
  • Survey reveals highest drop in confidence was recorded in “services sector”.
  • Manufacturing sector records net confidence level of positive 3% despite drop of 20%.

KARACHI: Pakistan’s business confidence score (BCS) decreased to negative 4% in September-October 2022, against positive 17% in March-April 2022, Overseas Investors Chamber of Commerce and Industry (OICCI) announced on Wednesday.

The OICCI’s comprehensive Business Confidence Index (BCI) Survey – Wave 22 was conducted throughout the country from September to October 2022.

It revealed that the highest drop in confidence was recorded in the “services sector” (24%), followed by “retail and wholesale trade” (22%), and the manufacturing sector (20%). 

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

Despite recording a significant drop in confidence of 20%, the manufacturing sector recorded a net confidence level of positive 3%, whereas the services and retail sectors stood at negative 8% and 14% respectively.

Commenting on the BCS, OICCI President Ghias Khan said, “The substantial decline in the overall Business Confidence to negative 4% is regrettable but not surprising considering the highly challenging political and economic situation during the past six months.”

Besides very high inflation and increased fuel prices, significant currency devaluation also dampened economic activity. 

“Record level of rains during August leading to severe flooding in Sindh and other parts of the country further restricted the business activities,” he added.

OICCI BCI Survey, conducted periodically face to face, across the country in nine cities, covering 80% of the GDP, with higher weightage given to key business centres of Karachi, Lahore, Rawalpindi-Islamabad, and Faisalabad.

The OICCI Survey 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.

Overall, more than half (56% vs 19% in previous wave) survey respondents were negative about the business environment in the past six months, and going forward only net 2% (vs 18% in the previous survey) were positive for the next six months. 

Commenting on the business situation for the next six months, OICCI Vice President Amir Paracha said, “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.”

Key stakeholders, especially foreign investors would 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, he added. 

The sentiments of the OICCI members, the leading foreign investors, who were randomly included in the survey, stand at positive 6%, substantially lower than the positive 33% in the previous wave. Foreign investors have in the past also shown higher confidence than non-members.

Commenting on OICCI members’ survey feedback, Ghias Khan, observed that “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 were seriously counterproductive for attracting foreign direct investment in the country. “The three major threats to business growth identified in the survey are inflation (78%), high taxation (71%), and currency devaluation (70%) which could potentially slowdown business growth in Pakistan, he noted.

Looking ahead, only 18% (34% in Wave 21) expect expansion in business operations, 2% (21% in Wave 21) planning new capital investment, and 7% of respondents (positive 16% in Wave 21) expect increased employment in their respective businesses.

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Trade Agreements Worth $10.70 Million Were Signed At Expo For Pakistan And Indonesia To Increase Their Trade With The Support Of SIFC

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Through the assistance of the Special Investment Facilitation Council (SIFC), Pakistan and Indonesia have reiterated their dedication to improving their economic and commercial ties.

The participation of a Pakistani trade delegation was made possible by Indonesia at a recent trade expo, which resulted in the formation of agreements and memorandums of understanding with a total value of 10.70 million $. In addition to retail items and automobile components, these agreements span industries such as coconut, cocoa, ginger, spices, and retail goods.

As a key step toward improving economic ties, particularly with the Sindh business community, the participation of the group was praised by Tegu Viveko, who is acting as the Consul General of Indonesia.

Abid Nisar, the head of the Pakistan-Indonesia business council, has stated his confidence regarding the possibility of enhanced relations between the two countries, highlighting the historical and cultural origins of the connection.

In its capacity as a member of the G20, Indonesia intends to assist both nations in maximizing the benefits of their partnership in order to achieve better economic stability.

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Pakistan’s textile exports rose by 9.51% to $4.520 billion.

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Pakistan’s textile exports had a 9.51 percent increase in the first quarter of the current financial year (2024-25) compared to the same quarter of the previous year.

The Pakistan Bureau of Statistics (PBS) reported that textile exports from the country amounted to US $4.520 billion during July-September (2024-25), compared to US $4.127 billion during the same period in the previous year (2023-24).

The textile goods that facilitated trade expansion comprised cotton fabric, whose exports rose by 10.20 percent to $523.63 million from $475.187 million, and knitwear, which experienced a 14.13 percent increase in exports to $1,268.908 million from $1,111.818 million.

Other commodities that experienced trade growth included bed wear, with exports increasing by 13.31 percent to $794.972 million from $701.570 million; towels, which rose by 7.04 percent to $261.316 million from $244.134 million; and tents, canvas, and tarpaulin, which grew by 5.43 percent to $28.796 million this year compared to $27.312 million last year.

The export of readymade garments increased by 23.17 percent to $996.831 million from $809.316 million; art, silk, and synthetic textiles rose by 15.79 percent to $96.482 million; made-up articles (excluding towels and bed wear) grew by 12.10 percent to $191.050 million from $170.422 million; and the export of other textile materials surged by 8.73 percent to $187.145 million from $172.112 million.

The textile commodities that had negative trade growth were cotton yarn, with exports decreasing by 48.45 percent, from $315.404 million to $162.579 million, while raw cotton exports fell by 100 percent from 6.621 million to zero during the reviewed months.

The export of yarn, excluding cotton yarn, decreased by 15.15 percent, from $10.096 million to $8.566 million.

In September 2024, textile exports experienced a year-on-year growth of 17.92 percent compared to the same month in the previous year.

Textile exports from the country in September 2024 amounted to US $1,604.481 million, compared to US $1,360.902 million in September 2023.

Textile exports from the country experienced a nominal decline of 2.40 percent in September 2024, compared to the $1,644.333 million reported in August 2024, according to PBS statistics.

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PIA is designated as the official airline of IDEAS 2004.

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PIA has been designated as the official airline of IDEAS 2024. The PIA will utilise its aircraft for the promotion of IDEAS 2024.

In this context, the emblems of IDEAS 2024 have been affixed to two Boeing 777 aircraft and two Airbus planes of Pakistan International Airlines.

The International Defence Exhibition and Seminar (IDEAS) 2024 is scheduled to commence from November 19 to 22 at the Karachi Expo Centre.

The government of Pakistan places significant value on IDEAS. The show draws several delegates and is perceived as a means to promote their local arms trade.

The inaugural IDEAS launch took place in 2000, serving as a platform to promote Pakistan’s indigenous arms manufacturing industry while allowing international suppliers to provide solutions for the needs of Pakistan’s tri-services.

The event, consistently held at the Karachi Expo Centre, attracted forty-five foreign delegations in its inaugural year.

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