The Overseas Investors Chamber of Commerce and Industry (OICCI) released the results of its Business Confidence Index (BCI) Survey Wave 29, conducted across Pakistan in the second quarter of 2026. The survey reveals a marked deterioration in business sentiment, with the overall BCI falling 9 percentage points to a positive 13 percent, down from 22 percent in Wave 28. The ongoing war in the Middle East casts a long shadow over investment confidence, supply chains, and economic growth prospects.
Key Findings of the Survey
The decline is driven primarily by elevated inflationary pressures, rising fuel costs, and the intensifying fallout from the war in the Middle East. The services sector recorded the sharpest drop, falling 20 points to 14 percent, while manufacturing declined by 7 points. The retail sector was the only segment to show improvement, rising 3 points to positive 20 percent.
Investment Intentions Weaken
Investment intentions have weakened sharply, with the new investment index collapsing 10 points to just 2 percent, reflecting a near-total freeze in near-term capital deployment. Around 70–80 percent of businesses across all sectors are delaying or revising investment decisions and diversifying supply chains to reduce exposure to affected trade routes. The strategic focus is shifting towards risk mitigation and operational resilience.
Global and Domestic Outlook
The survey’s global business situation indicator deteriorated by 31 points, and businesses across all sectors expect the disruption to persist well beyond six months. Looking ahead, 34 percent of respondents anticipate a negative outlook over the next six months, up sharply from 22 percent in Wave 28, with political instability, fuel prices, and inflation cited as the top concerns.
Structural Threats to Growth
When asked about the key structural threats to business growth, rising inflation topped the list at 84 percent, followed by high taxation at 79 percent, and concerns over currency stability and inconsistent government policies both at 61 percent.
Regional and Sectoral Variations
Business confidence among OICCI member companies, representing the country’s leading foreign investors, remained relatively resilient, improving marginally to positive 28 percent. Metropolitan confidence fell 12 points to 11 percent, while non-metro cities including Peshawar, Quetta, Rawalpindi, Multan, Sialkot, and Sukkur saw a modest 3-point improvement to 22 percent.
Long-Term Transformation
On a forward-looking note, the survey found growing business interest in generative AI adoption, with OICCI member companies showing notably higher readiness for large-scale integration across technology platforms, core business processes, and workforce development. This signals that despite near-term headwinds, leading foreign investors are positioning for long-term transformation.
