A recent survey indicates that Pakistani businessmen are increasingly optimistic about the prospects of their businesses, although many still believe the country is not heading in the right direction. This perception, as noted in the Gallup Pakistan Business Confidence Index Q4 2024 report, may reflect the overall political climate in Pakistan rather than issues related to economic management.
According to the survey, 55% of businessmen reported that their businesses are performing very well or well, marking a 10% increase from the previous survey conducted six months ago in Q2 2024. Notably, the number of businesses rating their performance as very bad has decreased by 7%. However, the manufacturing sector appears to have recovered less than the services and trade sectors regarding current business conditions.
Looking ahead, the business community is more optimistic about the future, with a 19% increase in positive expectations compared to six months ago. The Q4 survey revealed that 60% of businesses anticipate improvement, while 40% expect conditions to worsen. The Net Future Business Confidence score has risen by 36% since Q2 2024.
The survey attributes this growing optimism to factors such as reduced inflation, macroeconomic stability, and interest rate cuts, which have contributed to a significant decrease in business pessimism. However, the number of businesses expressing confidence has dropped by 20% from the previous survey, with the index shifting from negative to poor confidence, as defined by Gallup’s methodology.
The report also highlights that 41% of surveyed businesses believe the current ruling party, the Pakistan Muslim League-Nawaz, has managed the economy better than the previous government led by former Prime Minister Imran Khan, who received 38% of the votes. Meanwhile, 21% of respondents saw no significant difference in the performance of the two governments.
Inflation, which continues to erode consumer purchasing power, was identified as the most pressing issue, with 30% of businessmen urging the government to address it. The survey also noted that more service-oriented businesses than manufacturers and traders have reduced their workforce.
Overall, the report indicates that all three components of the Gallup Business Confidence Index have shown improvement since Q2 2024, reflecting a growing sense of optimism within the business community. This latest survey marks the 14th edition of Gallup Pakistan’s quarterly Business Confidence Survey, which was conducted across more than 30 districts and included responses from 482 small, medium, and large businesses.
