KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) on Tuesday released the results of its Business Confidence Index (BCI) Survey Wave 29, conducted across Pakistan during the second quarter of 2026.
The survey showed a marked deterioration in business sentiment, with the overall BCI falling by 9 percentage points to a positive 13 per cent from 22 per cent in Wave 28, as the ongoing conflict in the Middle East continued to weigh on investment confidence, supply chains and economic growth prospects.
The decline was driven primarily by elevated inflationary pressures, rising fuel costs and the intensifying impact of the conflict in the Middle East. The services sector recorded the sharpest decline, dropping 20 percentage points to 14 per cent, while the manufacturing sector fell by 7 points. The retail sector was the only segment to improve, rising 3 points to a positive 20 per cent.
Investment intentions weakened significantly, with the New Investment Index falling by 10 points to just 2.0 per cent, reflecting a near standstill in short-term capital deployment.According to the survey, between 70 per cent and 80 per cent of businesses across all sectors are delaying or revising investment decisions and diversifying supply chains to reduce exposure to affected trade routes. Companies are increasingly focusing on risk mitigation and operational resilience. The survey’s global business situation indicator deteriorated by 31 points, while businesses across all sectors expect the disruption to persist for more than six months.
“The results of Wave 29 are a clear signal that businesses operating in Pakistan are navigating an increasingly complex environment,” said M Abdul Aleem, secretary general of the OICCI.“The ripple effects of the Middle East conflict are being felt across every sector, from investment freezes to supply chain restructuring. While the fundamentals of the Pakistani market remain intact, restoring business confidence will require policy stability, cost relief and a concerted effort to shield the economy from prolonged geopolitical uncertainty.”
Looking ahead, 34 per cent of respondents expect business conditions to worsen over the next six months, up sharply from 22 per cent in Wave 28. Political instability, fuel prices and inflation were identified as the key concerns.
When asked about the principal structural threats to business growth, respondents ranked rising inflation as the top concern at 84 per cent, followed by high taxation at 79 per cent. Concerns over currency stability and inconsistent government policies were both cited by 61 per cent of respondents.
Business confidence among OICCI member companies, which represent many of the country’s largest foreign investors, remained comparatively resilient, improving marginally to a positive 28 per cent.
Confidence in metropolitan areas fell by 12 points to 11 per cent, while non-metropolitan cities, including Peshawar, Quetta, Rawalpindi, Multan, Sialkot and Sukkur, recorded a modest 3-point increase to 22 per cent.
On a more forward-looking note, the survey found growing interest in the adoption of generative artificial intelligence (AI). OICCI member companies demonstrated a notably higher level of readiness for large-scale AI integration across technology platforms, core business processes and workforce development, signalling that despite near-term challenges, leading foreign investors are positioning themselves for long-term transformation.
The BCI Survey is conducted twice a year by OICCI and covers participants representing approximately 80 per cent of Pakistan’s gross domestic product (GDP).
