ISLAMABAD  -  Pakistan’s businessmen are gaining confidence about the prospects of their businesses that they believe are improving, shows a latest survey.

However, a majority of them still opine that the country is not heading in the right direction, a perception that the survey report said may be reflective of the overall political situation in Pakistan and less linked with economic management.

According to the Gallup Pakistan Business Confidence Index Q4 2024 survey report, 55% businessmen think of their businesses doing very good or good these days. This shows 10% increase in their perception over previous survey conducted about six months ago in Q2 2024. The fieldwork did not happen in Q3. The number of businesses who used to rate themselves as very bad has declined by 7%.

The manufacturing sector seems to have recovered less than the services and trade sector when it comes to rating the current business situation, the report said.

About their future, the business community is more optimistic as their score has risen 19% from six months ago. 60% businesses in Q4 survey showed positive expectations about their future while 40% see things to worsen.

The Net Future Business Confidence score has increased 36% since Q2 2024.

“Reduction in inflation, macro-economic stability and interest rate cuts contribute to large decreases in business pessimism,” according to the survey report. However, there still remain grey areas as the ‘direction of the country score’ remained in the red in Q4-2024 that means more businesses feel that Pakistan is moving in the wrong direction. The number of such businesses however have reduced 20% from the previous survey as the index has improved from negative confidence to poor confidence as defined by the Gallup in its methodology.

“Overall trend for the past few quarters has been consistently negative, however, there has been some improvement in the current quarter, “ said the report. Asked which government managed the economy well, 41% of the businesses surveyed named the ruling Pakistan Muslim League-Nawaz while 38% rated the government of former Prime Minister Imran Khan as better managers. Twenty-one percent saw no difference in the performance of the two governments.

The backbreaking inflation, that erodes the purchasing power of consumers, was cited as the most important problem 30% businessmen would want the government to solve.

The number of businesses facing power outages declined as 56% surveyed said ‘no’ loadshedding happened in their establishment on the day of the survey, while 44% replied in affirmative. On quarterly basis, loadshedding decreased 17%.

“More service providing businesses than manufacturers and traders decreased their workforce, “ the survey results showed. Overall, the report said, all the three strands of Gallup Business Confidence have seen an improvement since Q2 2024, showing there is growing optimism in the business community.

This latest survey is the 14th edition of a quarterly Business Confidence Survey that Gallup Pakistan conducted in more than 30 districts of the country, surveying 482 small, medium and large businesses.

The Business Confidence Index is an important barometer capturing the sentiments of business community in any country and used across the world by policy-makers.