Islamabad: Investor confidence in Pakistan has improved, with 73% of foreign investors recommending the country as a viable destination for future foreign direct investment (FDI), up from 61% in 2023, according to the latest Perception and Investment Survey by the Overseas Investors Chamber of Commerce and Industry (OICCI).
The biennial survey, released on Tuesday, reflects cautious optimism among foreign investors, citing improved macroeconomic stability, a sharp decline in inflation — from 37% in mid-2023 to 4% projected by July 2025 — a stable exchange rate, and upgraded international credit ratings as key positive indicators.
The OICCI, representing over 200 multinational companies operating in Pakistan, reported that interest from parent companies had also increased. Around 35% of respondents said their headquarters now consider Pakistan a priority for new FDI, compared with 24% two years earlier.
The survey noted a shift in investor perception of business risk from “high” to “medium,” signalling growing confidence in Pakistan’s economic management. However, participants identified persistent challenges, including weak federal-provincial coordination, high energy costs, and slow tax refund processes.
Rising operational costs were cited as a major concern, with 96% of respondents reporting higher energy expenses, 95% pointing to increased wages, and 91% noting a surge in raw material prices. Over 80% said tax refunds take more than two years to process, while more than half reported that commercial dispute resolutions typically take five years or longer.
On the external front, 82% of respondents said negative international media coverage continued to influence investment decisions, underscoring the need for a stronger global narrative to improve Pakistan’s image.
Despite these challenges, the survey found that overall investor sentiment had strengthened since 2023. The share of respondents expecting global economic growth over the next two to three years rose to 58%, up from 40% in the previous survey. Investors identified information technology, renewable energy, agriculture, pharmaceuticals, and export-oriented manufacturing as promising sectors for future investment.
OICCI President Yousaf Hussain said the improvement in sentiment reflected the results of better macroeconomic management and policy coordination. He added that continued reforms in taxation and regulatory processes were vital to sustaining investor confidence.
OICCI Chief Executive and Secretary General M Abdul Aleem noted that while confidence had improved, Pakistan still faced competitiveness challenges due to high business costs and complex regulations. He urged harmonisation of tax policies and faster contract enforcement to translate investor optimism into sustained FDI inflows.
The OICCI said Pakistan’s ability to attract long-term investment would depend on consistent policy implementation and structural reforms. More than half of its member companies participated in the 2025 survey.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
