The confidence of Pakistan’s private sector has climbed to its strongest point in almost four years, according to Gallup Pakistan’s latest Business Confidence Survey. This upswing comes even as persistent challenges—such as inflationary pressures, rising utility bills, and recurring electricity outages—continue to strain day-to-day operations.
Conducted between July 23 and 27, the Q2 2025 survey gathered responses from 524 businesses spanning manufacturing, services, and trade sectors. The most notable finding is a sharp rebound in perceptions about the country’s overall trajectory. Gallup’s “Direction of the Country Score” has improved to -2%, marking a substantial recovery from the more pessimistic levels recorded in late 2024.
Although still slightly negative, this figure represents the highest level of optimism about the nation’s direction since Q4 2021. “This shift reflects a moderate reduction in political and economic uncertainty from the viewpoint of the business community,” the report highlighted.
Bilal Ijaz Gilani, Executive Director at Gallup Pakistan, described the current sentiment as “a cautiously improving mood” among business owners and managers. “While the improvement is gradual, it signals a growing belief in some degree of stability among economic participants,” he noted.
The survey also revealed an increased sense of confidence in the government’s handling of the economy, with Gilani emphasizing that sustained progress will depend on consistent macroeconomic reforms, predictable policymaking, and responsive institutions, particularly for those in the informal sector.
Operational and Performance Trends
In terms of business performance, 61% of respondents rated their ongoing operations as either “good” or “very good,” a rise of 6 percentage points compared to the previous quarter. The biggest gains were recorded in the services and trade segments, while manufacturers showed slower signs of recovery.
Looking ahead, 61% of participants expressed optimism about the coming months, resulting in just a 1 percentage point increase in the Future Business Confidence score. According to Gallup, this suggests that while businesses are not expecting conditions to deteriorate, there is also no strong wave of renewed optimism yet.
Challenges That Remain
When asked about the most pressing issues, respondents identified inflation, high energy costs, and taxation as the top concerns. Inflation, though eased to a historic low of 0.3% in April 2025 (down from 38% in May 2023), was still cited by 28% of participants as the top priority for government action.
High utility costs came second at 18%, followed by taxation concerns at 11%, a slight improvement from last year. Load-shedding also continues to affect productivity, with 47% of businesses reporting power outages on the day of the interview—though this is an improvement compared to previous years.
Corruption and Governance Insights
One of the more striking changes in this quarter’s survey is a significant drop in bribery cases. Only 15% of businesses admitted to paying a bribe in the past six months, compared to 34% in Q4 2024. Traders reported the highest occurrence at 20%, followed by service providers at 13% and manufacturers at 12%. Gallup noted that while bribery is still a concern, the decline could indicate greater transparency or increased caution among businesses.
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