Karachi: Business confidence in Pakistan has reached its highest level in nearly four years, according to a recent survey conducted by Gallup Pakistan. The survey highlights a growing optimism among businesses regarding the country’s direction under Prime Minister Shehbaz Sharif’s government, compared to the previous administration led by Imran Khan.
Despite ongoing challenges such as inflation, high utility costs, and frequent electricity load-shedding, the positive shift in sentiment marks a significant change. The Gallup business confidence survey for the second quarter of 2025, conducted from July 23 to 27, included responses from 524 businesses in the manufacturing, services, and trade sectors.
The survey’s standout finding is a notable rebound in perceptions of the country’s overall direction, with Gallup’s “Direction of the Country Score” now at -2 percent. This marks the highest level of confidence in national direction since the fourth quarter of 2021, indicating a moderate easing of political and economic uncertainty.
Additionally, the survey reveals an improved perception of the Sharif government’s ability to manage the economy. Forty-six percent of businessmen now rate the Pakistan Muslim League-Nawaz government’s economic management as better than that of the previous Pakistan Tehreek-e-Insaf administration, up from 24 percent a year ago.
Bilal Ijaz Gilani, Executive Director of Gallup Pakistan, commented on the survey results, noting a “cautiously improving mood” among Pakistani businesses. He emphasized the incremental shift reflects a growing sense of stabilization among economic actors.
Business performance also showed signs of improvement, with 61 percent of respondents describing their current operations as “good” or “very good,” an increase of six percentage points from the previous quarter. However, while services and trade enterprises reported significant gains, the manufacturing sector showed slower recovery.
Looking ahead, 61 percent of businesses expressed optimism about the coming months, albeit with only a marginal increase in the Future Business Confidence score. The survey indicates limited momentum for stronger optimism at this stage.
Challenges such as price hikes, high energy costs, and taxes remain significant concerns for businesses, highlighting persistent structural challenges in Pakistan’s business sector. Consumer price inflation, although eased to 0.3 percent in April from 38 percent in May 2023, remains a top priority for government action.
Energy insecurity continues to impact operations, with nearly half of respondents experiencing load-shedding during the survey period. Despite this, the figure is an improvement compared to previous years, suggesting potential seasonal or regional relief.
A notable shift in the survey is the decline in reported bribery, with only 15 percent of respondents admitting to paying a bribe in the past six months, down from 34 percent in late 2024. This decline may indicate improving transparency or increased risk aversion among firms.
Overall, the survey points to a measured improvement in private sector sentiment, particularly regarding national direction and current business operations. However, forward-looking confidence remains stagnant, with longstanding challenges like inflation, energy reliability, and governance continuing to shape Pakistan’s business climate.