Karachi: Pakistan’s businessmen are gaining confidence about the prospects of their businesses that they believe are improving, shows a latest survey. However, a majority of them still opine that the country is not heading in the right direction, a perception that the survey report said may be reflective of the overall political situation in Pakistan and less linked with economic management.
According to a statement by Gallup Pakistan, the Business Confidence Index Q4 2024 survey report indicates that 55% of businessmen think their businesses are doing very good or good these days. This reflects a 10% increase in their perception over the previous survey conducted about six months ago in Q2 2024. Notably, the fieldwork did not happen in Q3.
The survey also revealed a decline in businesses rating themselves as very bad, with numbers dropping by 7%. The manufacturing sector appears to have recovered less than the services and trade sector in terms of rating the current business situation.
Looking ahead, the business community is more optimistic, as their score has risen 19% from six months ago. In the Q4 survey, 60% of businesses showed positive expectations about their future, while 40% foresee a worsening situation. The Net Future Business Confidence score has increased by 36% since Q2 2024.
“Reduction in inflation, macroeconomic stability, and interest rate cuts contribute to large decreases in business pessimism,” according to the survey report. However, the number of such businesses has reduced by 20% from the previous survey as the index has improved from negative confidence to poor confidence as defined by Gallup’s methodology.
When asked which government managed the economy well, 41% of the businesses surveyed named the ruling Pakistan Muslim League-Nawaz, while 38% rated the government of former jailed Prime Minister Imran Khan as better managers. Twenty-one percent saw no difference in the performance of the two governments.
The survey identified backbreaking inflation, which erodes the purchasing power of consumers, as the most important problem 30% of businessmen want the government to solve. Additionally, more service-providing businesses than manufacturers and traders reportedly decreased their workforce.
Overall, the report said, all three strands of Gallup Business Confidence have seen an improvement since Q2 2024, indicating growing optimism in the business community. This latest survey is the 14th edition of a quarterly Business Confidence Survey that Gallup Pakistan conducted in more than 30 districts of the country, surveying 482 small, medium, and large businesses.