Karachi: Pakistan is witnessing a notable resurgence in business confidence, driven by improving macroeconomic stability, declining inflation, and optimistic expectations for the next six months.
According to economic data, the Pakistan Stock Exchange (PSX) recorded an impressive gain of over 80% in the past year, placing it among the best-performing markets globally. Despite regional tensions with India and ongoing security incidents involving missile and drone attacks, the PSX showed remarkable resilience. In contrast, India’s stock market experienced a downturn, with growing investor anxiety and lack of market confidence.
A sector-wise breakdown reveals strong recoveries across various industries. The manufacturing sector jumped from -3% to +15%, retail/wholesale rebounded from -18% to +2%, and the services sector grew from +2% to a robust +10%.
Adding to the positive momentum, the International Monetary Fund (IMF) recently approved Pakistan’s loan review and disbursed a $1 billion tranche. Additionally, $1.4 billion in financing under the Climate Resilience Fund was also sanctioned. These inflows have significantly strengthened Pakistan’s foreign reserves, which had fallen below $8 billion earlier this year—an important boost for currency stability and import financing.
Federal Finance Minister Muhammad Aurangzeb welcomed these developments, noting that the rise in business confidence is a clear indicator of Pakistan’s economy moving in the right direction. He reaffirmed the government’s commitment to maintaining an investor-friendly environment, supporting private sector growth, and ensuring long-term economic stability.
The latest Business Confidence Index, published by the Overseas Investors Chamber of Commerce and Industry (OICCI), reflects this shift in sentiment. According to their survey, overall business confidence in Pakistan rose from -5% in Oct–Nov 2024 to +11% in Mar–Apr 2025, marking a 16-percentage-point improvement.
Economists believe this phase presents a critical opportunity for Pakistan. If the government continues to maintain fiscal discipline and implements investor-focused reforms, the economy could be on a steady path to sustained recovery.
