Gallup Survey Reveals 42% Rise in Confidence Among Pakistani Business Owners

Business owners in Pakistan have seen a notable upswing in their outlook for the future, marking a 42% increase in confidence during the third quarter of 2023 compared to the previous quarter. This surge in positivity comes as a stark contrast to their previously uncertain sentiments, according to the recent Gallup Pakistan survey.

Despite persisting economic and political challenges, there's a discernible shift in the mindset of business owners, with fewer expressing pessimism about the trajectory of the country and their future prospects.

The survey highlights prevailing concerns regarding inflation, utility costs, and political instability, which continue to impact businesses. However, there's a palpable reduction in the overall sense of hopelessness compared to the preceding quarter.

Regarding future business conditions, an unexpected optimism prevails, with 61% of businesses expressing positive expectations, while 38% anticipate a decline. This surge in optimism has significantly elevated the net future business confidence score by 42%, now standing at a promising 22%.

Moreover, perceptions about the country's direction have notably improved, with 26% of respondents believing Pakistan is heading in the right direction. This reflects a positive change, marking a 30 percentage point increase compared to the previous quarter, pushing the Direction of the Country score to -47%.

Despite economic insecurities looming since 2022, the business situation score has remarkably improved by 25 percentage points, showcasing resilience amid ongoing crises.

Inflation remains a top concern, with three out of 10 businesses urging government intervention to address price hikes. The survey also highlights a growing concern about political instability in the third quarter, surpassing worries about rupee devaluation and fuel prices.

While concerns about layoffs due to business conditions persist, four out of 10 businesses reported a reduction in their workforce by 11% compared to the last quarter.

There's a notable trend of businesses increasing output prices, with over half of the surveyed businesses raising prices, a shift from the previous quarter where fewer businesses reduced their output prices.

Despite these positive shifts, a significant portion (73%) of respondents lacks confidence in the caretaker government's ability to address business-related issues, while 25% remain cautiously hopeful.

Bilal Ijaz Gilani, executive director at Gallup Pakistan, emphasized the encouraging trend in business sentiment after a consistent decline. He highlighted the positive trajectory in both current and future business confidence, attributing it to several indicators including stock exchange performance, an improved current account deficit, and consistent policy measures.

This quarterly Gallup survey, the 11th of its kind, interviewed approximately 530 businesses across Pakistan, serving as a crucial barometer for assessing the sentiments of the business community in the country.