Pakistan’s business community showed a modest boost in confidence at the start of 2026, according to the latest Business Confidence Survey (BCS) conducted by the State Bank of Pakistan (SBP) in partnership with the Institute of Business Administration (IBA).
The overall Business Confidence Index (BCI) rose by 2.0 points to 55.4 in January, signalling improving sentiment across key economic indicators. The survey tracks both current and expected business conditions, providing insight into how firms perceive the present economy and anticipate the months ahead.
The increase was reflected in the Current Business Confidence Index (CBCI), which measures sentiment over the past six months. This index climbed 2.3 points to 52.9, supported by stronger production levels, better credit conditions, and an improved view of general economic conditions. “Businesses reported higher operational activity and access to financing compared with the previous half-year,” the survey noted.
Looking ahead, the Expected Business Confidence Index (EBCI), representing sentiment over the next six months, rose by 1.73 points to 57.83. Despite ongoing challenges, companies remained cautiously optimistic about production, employment, and demand for their products.
Inflation expectations remained at 5.8, with firms anticipating moderation in both overall inflation and input costs. The expected input price index declined by 1.3 points to 65.9, suggesting businesses foresee easing pressure on raw material prices.
Employment sentiment showed a mixed picture. The Current Employment Index increased by 1.4 points to 52.0, reflecting higher staffing levels over the past six months, while the Expected Employment Index dipped slightly by 1.3 points to 54.8, indicating some caution in future hiring plans.
Meanwhile, manufacturing activity showed a small decline, with average current capacity utilisation slipping 0.2 percentage points to 66.2 per cent. The reduction pointed to weaker order books and inventory adjustments in the sector.
Overall, the survey highlighted a delicate balance in Pakistan’s business landscape: firms are encouraged by recent improvements in economic conditions but remain watchful of potential challenges ahead.
Analysts said the rising confidence could support investment and production, provided macroeconomic stability continues.
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