A survey conducted to gauge business confidence in the country between May to June 2020 on Wednesday showed that the confidence of businesses in the country has plummeted.
The Overseas Investors Chamber of Commerce and Industry (OICCI) shared results of its Business Confidence Index (BCI) Survey – Wave 19 showing that the overall Business Confidence Score (BCS) in Pakistan stands at 50 percent negative, a further drop by 5pc from the already – 45pc negative score in Wave 18 Survey conducted in August 2019.
“The latest results reflect the continued pessimism across all sectors in general and particularly in the manufacturing and services sector. The business confidence of the manufacturing sector, which represents about 42pc of the respondents, declined by 5pc over the past six months and was 48pc negative compared to 43pc negative in Wave 18. The BCS of the services sector, representing 29pc of the survey respondents suffered a significant dip from 49pc negative in Wave 18 to 59pc negative. The BCS of retail and wholesale trade remained unchanged; 44pc negative in both Wave 18 and Wave 19 surveys,” the chamber said.
The results of the latest BCI Survey, conducted throughout Pakistan during May to June 2020, were largely influenced by the COVID-19 pandemic which has negatively impacted nearly all the businesses.
The prolonged uncertainty, due to the pandemic and strict lockdowns and other corrective measures taken by the authorities impacted a large segment of business activities.
Commenting on the low BCS, OICCI President Haroon Rashid said “the huge scare caused by the pandemic, came during a period when the country was already in the midst of a major economic stabilization program since early 2019, with a significant devaluation of currency (38pc decline in the past 12 months to June 2019) very high SBP policy rate (as high as 13.25pc in Dec ‘19) and resultant high inflation impacting all businesses.”
“Therefore the poor Business confidence score in the last two surveys, while a matter of concern to all the stakeholders are not surprising, in fact quite understandable, under the current challenging circumstances. Key is to focus on the future that looks both brighter and rife with opportunity as the country is slowly coming out of its COVID crisis, there is significant latent growth potential in the country, Govt. and OICCI need to work together to create a positive growth momentum for the country”.
During the past 6 months, majority of the respondents experienced decline in their sales volumes, profits and ROI and were unable to expand their business. However, for the next 6 months the survey respondents are comparatively more positive.