Pakistan business confidence hits 4-year high despite inflation, load-shedding

ISLAMABAD: Pakistan’s private sector business confidence has surged to its highest level in nearly four years, according to Gallup Pakistan’s latest survey, despite ongoing challenges such as inflation, high utility costs, and electricity load-shedding.

The survey, conducted between July 23 and 27, 2025, captured the views of 524 businesses across manufacturing, services, and trade sectors.

It reveals a marked improvement in business sentiment, with the Gallup “Direction of the Country Score” reaching -2%, up from much lower readings in late 2024.

While still negative, this score represents the highest level of confidence in the national direction since Q4 2021, suggesting a moderate easing of political and economic uncertainty.

Gallup’s findings indicate that 46% of business owners now rate the management of the economy under the Pakistan Muslim League-Nawaz (PML-N) government as better than the previous Pakistan Tehreek-e-Insaf (PTI) administration, a sharp increase from 24% last year.

Business Performance and Optimism

Business performance also showed signs of recovery, with 61% of respondents describing their operations as “good” or “very good,” an increase of six percentage points from the previous survey. While the services and trade sectors reported the most significant improvements, recovery in the manufacturing sector has been more gradual.

Pakistan Business Confidence Continues to Climb – Gallup Survey

As per the latest Survey by Gallup for Q2 2025 (Apr-May-Jun25):

– Confidence in Country Direction Hits 4-Year High – Best since Q4 2021.

– Current Business Conditions Strongest in Years – 61% rate performance… pic.twitter.com/LIMhalx2FJ

— Khurram Schehzad (@kschehzad) August 11, 2025

Looking ahead, 61% of businesses expressed optimism about the coming months, with the Future Business Confidence score improving slightly by one percentage point.

Key Concerns

Despite the positive outlook, challenges remain. The top concerns for businesses are price hikes, high energy costs, and taxation. Consumer price inflation, which has eased to a record 0.3% in April from 38% in May 2023, is still seen as a pressing issue by 28% of respondents. High utility costs were cited by 18%, while 11% mentioned taxation as a concern—showing a slight decrease from last year’s levels.

Energy insecurity, particularly load-shedding, continues to affect operations. Nearly half (47%) of businesses reported experiencing power outages on the day of the survey, though this figure marks some improvement from previous years, potentially indicating regional or seasonal relief.

Decline in Bribery Reports

A notable shift in the second-quarter survey is a significant decrease in reported bribery. Only 15% of respondents admitted to paying a bribe in the last six months, down from 34% in Q4 2024. Bribery was most prevalent among traders (20%), followed by service providers (13%) and manufacturers (12%).