The latest Gallup survey conducted in the first quarter of the year reveals that a significant 73% of businesses do not hold hope that the newly elected government under Prime Minister Shehbaz Sharif will effectively address the country’s business challenges. Only 25% of the businesses surveyed expressed some degree of hopefulness.
The survey findings indicate that 47% of Pakistan’s businesses, particularly those involved in selling garments, commodities, stationery, and gift items, perceive themselves to be in bad or worsening conditions, although there has been a slight three percent improvement over the previous quarter.
Despite ongoing political unrest, the current business situation score on the Gallup Business Confidence Index has shown improvement, rising by seven percentage points to 6% in the first quarter of 2024 from -1% in the previous quarter. However, expectations for future business conditions are pessimistic, with the net future business confidence score worsening by 16% since the last quarter, now standing at 4%.
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Regarding the direction the country is heading, only 20% of respondents believe Pakistan is heading in the right direction, with the direction of the country score falling to -60%, down 13 percentage points compared to the previous quarter.
Inflation remains a major concern for businesses, with more than two out of four businesses hoping the new government will take steps to control it. Additionally, concerns over utility bills and business-related legislation have increased. The survey also highlights challenges faced during the past three months, including a decrease in the workforce for three out of 10 businesses and worsening sales during Ramadan for more than half of the businesses surveyed.
Despite government claims of reducing load-shedding, the number of businesses experiencing power outages has increased. Overall, while there is some improvement in businesses’ current situations, pessimism persists about the country’s economic future and direction. Lack of certainty about political and economic policies continues to impact business sentiment negatively.
The executive director at Gallup Pakistan emphasizes the importance of government engagement and active resolution of business community issues, urging policymakers to prioritize stability and continuity of policies to address the concerns raised by the survey.
