Islamabad: Business confidence in Pakistan has sharply declined in the second quarter of 2024, as indicated by Gallup Pakistan’s latest Business Confidence Index. The report highlights widespread concern over the 2024 Budget, inflation, and government economic management.
According to Gallup Pakistan, the Business Confidence Index, a significant measure of the business climate, has worsened due to various challenges, including political instability and economic policies. A significant majority of businesses (86%) expressed that the 2024 Budget is not business-friendly, and concerns over inflation were prominent, with nearly two-fifths of businesses citing it as their primary issue. Furthermore, over half of the businesses surveyed (54%) viewed the current PMLN government’s economic management as inferior to its predecessor.
The survey, conducted across more than 30 districts with 454 businesses from various sectors, reflects the sentiments of small, medium, and large enterprises. Findings indicate a bleak outlook for the future business conditions, with a notable decline in optimism compared to the first quarter of the year.
Bilal Ijaz Gilani, Executive Director of Gallup Pakistan and chief architect of the index, noted the profound impact of political uncertainty and recent tax-heavy budgets on business optimism. “Businesses are feeling the weight of increased regulatory and tax burdens, and the majority have serious reservations about the economic directions being taken,” said Gilani.
The report also outlined issues like crippling load shedding affecting 6 in 10 businesses, and a considerable number facing workforce reductions. The survey highlighted a general expectation of worsening conditions, with specific sectors like manufacturing feeling the brunt more acutely than others.
As Pakistan navigates these economic challenges, the findings of the Gallup Business Confidence Index serve as a critical indicator for policymakers and business leaders alike, emphasizing the need for responsive and considerate economic strategies.