Karachi, A new Gallup Pakistan survey reveals a slight improvement in the business confidence index among Pakistani businesses, despite a generally pessimistic outlook on the future. Conducted in the first quarter of the year, the survey indicates that 47% of businesses, particularly in retail sectors like garments and commodities, see their current conditions as unfavorable, yet marking a 3% improvement from the last quarter.
According to Gallup Pakistan, the Business Confidence Index in the country has experienced a marginal uptick of seven percentage points, rising to 6% from -1% in the previous quarter. This improvement comes even as economic stability remains uncertain amidst Pakistan’s turbulent political landscape.
The report highlighted a contrast between recovering current business scores and declining optimism about future business conditions and the country’s direction. Only 20% of the surveyed businesses felt Pakistan is moving in the right direction, a drop of 13 percentage points from the previous quarter. The future business score also fell sharply, revealing deepening concerns over long-term economic prospects.
Inflation remains the primary concern, with businesses expressing a desire for the government to prioritize price stability. Furthermore, the depreciation of the rupee is growing as a significant worry among business owners.
Workforce reductions have slightly decreased, with 30% of businesses reporting cutbacks, down 6% from the previous quarter. However, more than half of the businesses reported reduced sales this Ramadan, with only 18% experiencing better sales.
The survey shows a lack of confidence in the newly elected government of Prime Minister Shehbaz Sharif, with 73% of businesses skeptical of its ability to address economic challenges, while only a quarter showed some optimism.
Corruption also emerged as a concern, with a minority of service providers and manufacturers reporting bribe payments as a requirement for business operations. Business perceptions of the government were mixed: while 45% considered it irrelevant to their operations, others saw it as either a facilitator or an impediment.
Additionally, the report reveals increased power outages affecting businesses, contradicting claims of reduced load-shedding by the government.
Bilal Ijaz Gilani, Executive Director at Gallup Pakistan, recognized the slight improvement in current business conditions as a positive sign but underscored the overall negative outlook on Pakistan’s economic direction. He called for concerted efforts by economic and political leaders to foster stability and policy continuity.
Gilani stressed the need for government engagement with the business community, deeming it essential for addressing ongoing issues and bolstering business sentiment.
The Gallup Pakistan Business Confidence Index serves as a vital gauge of business sentiment and informs policymakers worldwide. This recent survey, which engaged approximately 535 businesses across Pakistan, continues to be a crucial measure of business outlook in the nation.