ISLAMABAD: Notwithstanding various challenges, Pakistan’s economy is showing signs of resilience and gradual improvement as indicated in a recent report by the Overseas Investors Chamber of Commerce and Industry (OICCI).
According to the report, business confidence in Pakistan improved by four percentage points to -14% in March-April 2024 from -18% in October-November 2023. Sector-wise, manufacturing confidence declined to -15%, indicating significant challenges. Retail sector confidence rose by 16 points, from -31% to -15%, showing the most improvement. The services sector’s confidence improved to -14% from -18%, reflecting some optimism despite remaining negative.
Speaking on the development, Majid Shabbir, adviser to the Islamabad Chamber of Commerce and Industry, told Media that Pakistan’s economic trajectory had exhibited a volatile growth pattern over the years, characterised by periodic boom and bust cycles. “These cycles have created significant challenges for achieving sustained, long-term, and inclusive economic growth. The root causes of this volatility are deep-seated structural issues that, when left unaddressed, contribute to unsustainable economic growth.”
He further elaborated that while there had been tangible improvements in certain economic indicators, the overall sentiment within the business community remained cautious. “This cautiousness is primarily driven by uncertainties surrounding political stability and the consistency of economic policies.”
Majid suggested that the government should implement policies with broad political support and are designed to remain consistent over time regardless of changes in political leadership. “This can be achieved through bipartisan agreements and long-term strategic planning.”
“Efforts to improve the ease of doing business have yielded positive results, but more needs to be done. Streamlining regulatory processes, reducing bureaucratic inefficiencies, and enhancing transparency are critical steps toward creating a more business-friendly environment,” he underscored.
The ICCI adviser said that addressing these issues would help reduce operational costs, foster innovation and attract both domestic and foreign investment.
“Businesses should be given export-oriented goals and incentivised to develop international markets. Moreover, the privatisation of loss-making state-owned enterprises should be done to bolster competition and turn around these organisations. Lastly, as technology is a source of revenue globally, young graduates should be given IT training focused on providing services to international clients, which can reduce unemployment and earn foreign exchange for the country,” stressed the ICCI official.
The OICCI Business Confidence Index has shown signs of economic recovery. This upward trend, though modest, indicates a more optimistic business environment, supported by improving economic growth, a stable exchange rate and declining inflation, according to the chamber’s secretary general M Abdul Aleem. –INP
