In the face of ongoing economic and political uncertainties, Pakistan’s business landscape appears to be cautiously optimistic, as indicated by the latest Gallup Pakistan Survey. Despite concerns surrounding inflation, utility bills and political instability, there is a notable 42% increase in business owners’ expectations for a brighter future compared to the previous quarter.
According to a news report published on these pages, the survey acknowledges persisting business insecurity due to economic and political crises. However, it highlights a shift in sentiment, with fewer business owners expressing hopelessness than in the previous quarter. Notably, 61% of businesses express positive expectations for future conditions, contributing to a 42% improvement in the net future business confidence score since the spring, now standing at 22%.
While concerns about inflation, utility bills and political instability persist, there is a surprising optimism regarding future business conditions. The direction of the country score has seen a significant improvement, with 26% of respondents believing Pakistan is heading in the right direction, a 30-percentage point increase from the quarter before.
Despite the overall low confidence in the business community, there is a 25% improvement in the business situation score, contrasting the worsening economic insecurity since the beginning of the year. Inflation remains a primary concern, but political instability has gained prominence in the third quarter, surpassing worries about the devaluation of the rupee and fuel prices.
Businesses have faced challenges such as layoffs, with 40% acknowledging a reduction in their workforce by 11% from the last quarter. Moreover, over half of the businesses surveyed increased their output prices, reflecting the economic pressures they continue to grapple with.
The survey sheds light on the business community’s perception of the caretaker government, with a significant 73% expressing skepticism about its ability to address the challenges faced by businesses. The concerns extend to power outages, with 38% reporting loadshedding, albeit showing a decline of 31% from the previous quarter.
Bilal Ijaz Gilani, executive director at Gallup Pakistan, sees the report as positive news, indicating an upward trajectory in both current and future business confidence. He points to various factors, including an improved stock exchange index, a positive outcome of IMF loan tranches, and consistency in policy, contributing to this positive shift.
As the 11th quarterly Business Confidence Survey conducted by Gallup Pakistan, these findings serve as a crucial barometer for policymakers. Despite the challenges, the business community is cautiously hopeful, and the report suggests that maintaining momentum in key indicators could foster continued improvement in the coming quarter.
