Islamabad: Shahid Rasheed Butt, a prominent business leader and former president of the Islamabad Chamber of Commerce, has raised concerns over the country's economic direction, attributing the decline in public confidence and investment to current policies. He highlighted an alarming trend of professionals and workers leaving Pakistan, and both foreign and local investors pulling back from the market.

According to Islamabad Chamber of Commerce and Industry, Butt reported a 43.3 percent drop in foreign direct investment from July to December 2026. Portfolio investment also saw a decline, with figures revealing a negative 225.1 million dollars, compared to negative 221.8 million dollars in the previous year. This data, he asserted, underscored a significant erosion of investor trust.

Butt pointed out that the first half of fiscal year 2026 witnessed a 5 percent fall in exports and an increase in the current account deficit to 1.174 billion dollars, surpassing last year's numbers for the same timeframe. He noted that foreign exchange reserves stood at 21.3 billion dollars, with 16.1 billion held by the State Bank of Pakistan, much of it in borrowed funds, indicating potential concerns for the country's economic future.

The business leader also remarked on the agricultural sector, noting a growth of 2.9 percent in the first quarter of the fiscal year, an improvement from 1.0 percent the previous year. However, he expressed concern over declines in major crops excluding wheat, with cotton production dropping by 1.2 percent, green fodder output by 14.4 percent, and fertilizer prices climbing 13 percent, posing challenges for farmers.

Butt highlighted a decrease in credit disbursement to the private sector, with figures at 578.4 billion rupees from July to January, down from 1.520 trillion rupees in the same period last year. He emphasized the necessity of immediate policy reforms to reverse the weakening private sector conditions and stagnant investment.

He called for urgent policy changes, cautioning that ongoing uncertainty would lead to higher prices, job losses, and diminished private investment. Butt urged the government to engage with the business community, exporters, and farmers before implementing new fiscal or regulatory measures, stressing that without restoring policy predictability and investor confidence, efforts at economic stabilization would be temporary and fragile.