Pessimism rises among Pakistan's business community: Gallup Survey

April 07, 2023 (MLN): Businesses in Pakistan are facing a grim situation as the country struggles with high inflation, political instability, and the looming threat of sovereign default.

According to a Gallup Pakistan survey, conducted in the first quarter of 2023, around 66% of businesses perceive themselves as being in a bad or worse state. This sentiment has been on the decline since the end of last year, with negative perceptions at an all-time high.

The survey, which covered around 520 businesses across Pakistan, found that businesses are struggling on multiple fronts.

High inflation is killing consumer purchasing power, and the lack of stability in the political system is causing overall despair not just in the business community but also among their customers.

Moreover, there seems to be no end in sight with respect to the looming threat of sovereign default.

Bilal Ijaz Gilani, Executive Director of Gallup Pakistan and Chief architect of the Gallup Pakistan Business Confidence Index Pakistan commented that businesses in Pakistan are facing multiple calamities, and in his many decades of reading the pulse of the business community, he has not seen such dire times being reported.

The survey found that most business types reported being in a bad state, with around 70% of businesses perceiving bad conditions in Sindh and KPK, and 64% in Punjab.

Additionally, 61% of businesses said that their future expectations are negative, while only 38% expect things to improve at all.

The Net Future Business Confidence score has worsened by 11% since the previous quarter and is now at -22%. Negative perceptions are at an all-time high, with 90% of businesses surveyed opining that the country is headed in the wrong direction.

More than half of the businesses surveyed (57%) have not undergone layoffs in the last quarter, but 38% do report a decrease in their workforce during this time.

Furthermore, 58% of businesses surveyed said that they raised average output prices in the last quarter, with 45% raising those prices between 20% and 50%.

The situation in Pakistan is precarious, and the business community is deeply worried about the current and future conditions. 

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