Pakistani Businesses Show Cautious Optimism, Gallup Survey Finds

Lahore – Confidence in the government’s economic stewardship has risen sharply over the past year, with more businesses now viewing the PML-N administration’s handling of the economy as an improvement over the previous PTI-led government, according to Gallup Pakistan’s latest Business Confidence Survey.

Conducted between July 23 and 27, the survey covered 524 companies across manufacturing, services, and trade. Nearly half of respondents (46%) rated the current government’s economic management as better than its predecessor’s — up from just 24% in mid-2024.

Business Mood Lifts, But Worries Linger

The report shows sentiment shifting in the government’s favor, yet inflation, soaring energy costs, and heavy taxation remain the top headaches for firms. Structural weaknesses — including unreliable power supply and a lack of formal support for the informal economy — continue to weigh on growth prospects.

Gallup’s “Direction of the Country” score, a key indicator of business sentiment, climbed to -2%, its best reading since late 2021. While still in negative territory, the improvement reflects reduced uncertainty on both political and economic fronts.

“This is a cautiously improving mood,” said Gallup Pakistan’s Executive Director Bilal Ijaz Gilani. “The shift is most visible in perceptions of the country’s direction and in trust toward the government’s economic handling. But sustaining this will require consistent policies, institutional responsiveness, and meaningful reforms.”

Modest Gains in Performance and Outlook

Current business performance indicators also improved, with 61% of firms describing operations as “good” or “very good,” up six points from the last survey. Services and trade businesses saw the strongest gains, while manufacturing lagged behind.

Expectations for the near future, however, remain measured. Sixty-one percent of respondents are optimistic about the months ahead — only a one-point rise from the previous survey — suggesting most businesses anticipate stability rather than rapid improvement.

Inflation Still the Main Threat

Even with consumer inflation cooling dramatically — from a staggering 38% in May 2023 to just 0.3% in April 2025 — price pressures are still the top concern for 28% of businesses. High utility costs follow at 18%, while taxation worries have eased slightly, with 11% citing it as their primary issue.

Energy shortages remain disruptive. Nearly half of surveyed businesses reported power outages on the day they were interviewed, although this is an improvement compared to past years, hinting at possible seasonal or regional relief.

Bribery Reports See Sharp Decline

One of the more surprising findings was a drop in reported bribery. Only 15% of respondents admitted paying a bribe in the past six months, down from 34% in late 2024. The practice was most common among traders (20%), followed by service providers (13%) and manufacturers (12%). Gallup suggests the trend could point to better transparency or greater caution among firms.

Outlook: Improvement, but No Breakthrough Yet

Overall, the survey depicts a private sector that is more confident in the present than it was a year ago — especially in its view of the government’s economic management. But while the mood has improved, deep-rooted challenges in inflation control, energy supply, and governance still set the tone for the months ahead.