Despite facing ongoing challenges, Pakistani business owners are showing a notable increase in confidence, with their expectations for a brighter future rising by 42% from the previous quarter, as per the latest Gallup Pakistan survey.
Compared to Quarter 2, fewer business owners express pessimism about future conditions and the country’s direction, according to the third-quarter Gallup Business Confidence Index report. While economic and political crises persist, a sense of optimism about the future prevails among businesses.
The survey notes growing concerns about inflation, utility bills, and political instability within the business community. However, overall, there is a reduced sense of hopelessness compared to the previous quarter.
When asked about expectations for future business conditions, a surprising 61% of businesses express positive outlooks, with 38% expecting things to worsen. The net future business confidence score has improved by 42% since the spring, reaching 22%, according to the survey report.
Perceptions about the country’s direction have also improved, with 26% of respondents indicating that Pakistan is heading in the right direction. The Direction of the Country score has increased to -47%, representing a 30-percentage-point improvement from the previous quarter.
Despite economic challenges since 2022, the overall confidence of the business community is on the rise. Economic insecurity has worsened in the country since the beginning of the year, but the business situation score has improved by 25 percentage points.
Inflation remains a significant concern for most businesses, with three out of 10 stating that they would like the government to address the issue of price hikes. In the third quarter, relatively more respondents expressed concerns about political instability compared to the previous quarter.
While worries about the devaluation of the rupee and fuel prices have diminished, businesses are now more concerned about taxes and load-shedding in the country.
Regarding business conditions causing layoffs, four out of 10 surveyed businesses confirmed a reduction in their workforce by 11% from the last quarter. More than half of the surveyed businesses increased their output prices this quarter, with comparatively fewer reducing their output prices.
Despite the overall optimism, 73% of the businessmen did not express hope that the caretaker government of Prime Minister Anwaar-ul-Haq Kakar would address the country’s business problems, while 25% remained somewhat hopeful.
The survey, conducted with around 530 businesses across Pakistan, marks the 11th quarterly Business Confidence Survey by Gallup Pakistan, serving as a crucial barometer for policymakers globally.