World confidence grows as Pakistan’s economy gains momentum

June 03, 2025 (MLN): Pakistan’s economic revival gains momentum as independent surveys and major global financial institutions highlight rising optimism and strong endorsements, according to a recent post on X by Khurram Schehzad, Advisor to the Finance Minister.

Ipsos reported that consumer confidence reached a six-year high, and PwC noted CEO optimism soared to 83%. OICCI’s Business Confidence Index jumped from –5% to +11%, and Gallup highlighted a 27.5% improvement in household financial outlook within just one quarter.

Meanwhile, the IMF praised Pakistan’s strong reform efforts, and the IFC committed $2 billion annually. Fitch Ratings upgraded Pakistan’s credit outlook from CCC+ to B–, and Moody’s revised its banking sector outlook to Positive, all confirming the country’s improving macroeconomic conditions.

PwC: CEO Optimism at 83%

Business optimism among Pakistani CEOs has risen sharply, with 83% expecting economic improvement, up from 49% last year, according to PwC’s 28th Annual Global CEO Survey.

The survey, reflecting views of 70 CEOs, shows 92% confidence in revenue growth over the next year and 99% over three years.

Despite optimism, concerns remain around macroeconomic volatility (46%), inflation (39%), and geopolitical risks (31%). CEOs are prioritizing business model reinvention, with 44% believing their firms must transform to stay viable over the next decade.

AI adoption is a key focus, with 75% expecting integration, though its financial impact remains limited. Sustainability is also gaining importance, with 80% making climate-friendly investments and 58% linking executive pay to sustainability goals.

Ipsos: Confidence Hits Six-Year High

Consumer confidence in Pakistan has surged, with the Ipsos Q2 2025 survey showing a 4-point rise in the Global Consumer Confidence Index and national optimism at its highest level in six years.

Currently, 42% of Pakistanis believe the country is on the right track, up from just 2% in September 2023.

Economic concerns like inflation and unemployment are easing, while confidence in the economy’s strength rose to 29%, the highest since 2019.

Optimism about local economic conditions jumped from 12% in August 2024 to 37% in May 2025, surpassing pessimism for the first time.

Job security confidence hit a record 30%, and 36% expect personal financial improvements in the next six months. Additionally, 19% feel more comfortable making household purchases, reflecting growing consumer sentiment nationwide.

OICCI: Business Confidence Index Rises to +11%

The Overseas Investors Chamber of Commerce and Industry (OICCI) reported a sharp rise in business sentiment, with its Business Confidence Index climbing from –5% to +11%, a 16-point improvement from the previous survey.

Conducted in March-April 2025, the survey highlights optimism driven by improving macroeconomic indicators, falling inflation, and a positive outlook for the next six months.

About 45% of respondents expect better conditions ahead, while negative sentiment about the past six months fell to 53% from 66%.

Gallup: Household Financial Outlook Up 27.5%

Gallup Pakistan reported strong economic improvement signs, with the Household Financial Outlook rising 27.5% in just one quarter, according to the Gallup & D&B Quarterly Consumer Confidence report.

The overall Consumer Confidence Index surged 20.9% in Q2 FY2024-25, reaching 88.1 points the highest level in seven quarters.

This is driven by declining inflation, improved GDP growth, exchange rate stability, and relative political calm.

Over 50% of respondents expect household finances to improve, with optimism rising around the country’s economic outlook, employment opportunities, and household savings.

IMF: Pakistan’s Economy on the Right Track with Strong Reforms

The IMF’s recent review highlights significant progress under the Extended Fund Facility (EFF) program, supported by strong reforms focused on macroeconomic stability and sustainable growth.

Key achievements include a primary fiscal surplus of 2.0% of GDP, historic low inflation at 0.3%, and gross reserves reaching $10.3bn as of April 2025.

The IMF also approved $1.4bn under the Resilience and Sustainability Facility (RSF) to help Pakistan build economic and climate resilience through improved disaster response, efficient water use, and better climate risk management.

IFC Commits $2 Billion Annually, Confident in Pakistan

The International Finance Corporation (IFC) has committed to investing $2bn annually in Pakistan, emphasizing that this amount is modest given the country’s significant infrastructure needs in airports, energy, water, and ports.

IFC Managing Director Makhtar Diop highlighted ongoing efforts to advance large-scale financing deals by October, signaling confidence in Pakistan’s readiness for major investments.

Amidst Pakistan’s challenging recovery under a $7bn IMF bailout and low foreign reserves, the IFC’s $2.1bn exposure in FY2024 marks a record investment.

Key focus areas include agriculture, infrastructure, the financial sector, and digital development, aligning with broader World Bank plans to allocate up to $20bn under the Country Partnership Framework.

Fitch Upgrades Pakistan Credit Outlook to B–

Fitch Ratings upgraded Pakistan’s Long-Term Foreign-Currency Issuer Default Rating to ‘B-’ from ‘CCC+’ with a stable outlook, reflecting increased confidence in Pakistan’s progress on narrowing budget deficits and implementing reforms under the IMF program.

Fiscal improvements include a budget deficit expected to narrow to 6% of GDP in FY25 and a primary surplus forecast above 2%, supported by stronger provincial revenues and spending discipline.

Though risks remain from global trade tensions, large external financing needs, political uncertainties, and security issues, Pakistan’s rebuilding of policy credibility, reserve accumulation, and a $700m current account surplus in the first eight months of FY25 contribute to a more optimistic outlook.

Moody’s Revises Outlook to Positive

Moody’s upgraded Pakistan’s banking outlook to positive, citing stronger financial performance and improving macroeconomic conditions, including projected 3% GDP growth and easing inflation.

Despite risks from high sovereign debt exposure and fiscal fragility, banks maintain solid capital buffers.

The positive outlook is supported by IMF support, monetary easing, and better FX reserves, although net interest margins and returns are expected to decline in 2025.

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