Pakistan businesses fear default still imminent, Gallup Survey reveals

This survey is the 10th edition of a quarterly Business Confidence Survey conducted by Gallup Pakistan

ISLAMABAD: In a recent Gallup survey, the majority of Pakistan’s businesses have expressed deep concerns about the country’s ability to avert a potential default on its international financial obligations. This apprehension persists despite Islamabad’s recent success in securing a $3 billion bailout package from the International Monetary Fund (IMF), which temporarily staved off an imminent crisis.

The survey, conducted in the second quarter of 2023 by Gallup Pakistan, encompassed more than 500 businesses across Pakistan. An alarming 72% of respondents expressed grave concerns regarding Pakistan’s potential default, highlighting the lingering economic uncertainties in the nation.

Of these respondents, 49% indicated a significantly high level of concern, while 17% displayed no concern at all, as revealed by the Gallup Pakistan Business Confidence Index Q2 2023 report.

Surprisingly, the survey also indicated that the business community was slightly less pessimistic about their own businesses’ fate compared to the previous quarter, despite the ongoing crises, escalating inflation, and rising power costs. Inflation, utility bills, and rupee devaluation topped the list of growing concerns among business owners.

However, business owners remain predominantly pessimistic about future prospects and the overall direction in which Pakistan is heading. The survey points to persistent business insecurity due to the prevailing economic and political crises.

The relentless inflation, in particular, has been cited as a critical issue, with business owners urging the caretaker government to address this problem as it erodes people’s purchasing power and keeps interest rates at a record high.

The sharp depreciation of the Pakistani rupee and the imposition of taxes also featured prominently on the list of concerns that businesses want the government to tackle. Additionally, the survey highlighted a 25% increase in businesses facing load-shedding during the quarter, with 69% confirming power outages.

A particularly distressing finding is that half of the businesses surveyed reported having to lay off employees due to the challenging business conditions, representing a 13% increase compared to the previous quarter.

When questioned about their current and future business outlook, as well as the country’s direction, the respondents overwhelmingly expressed pessimism. While these negative sentiments persist, there was a marginal improvement in business confidence compared to the first quarter, as indicated by slight percentage point increases in various aspects.

Notably, despite economic insecurity, the current business situation score on Gallup’s second-quarter Business Confidence Index improved by two percentage points. However, this improvement did not offset the overall negative sentiment.

Concerns regarding the future were equally pronounced, with 60% expressing negative expectations for their businesses. Only 40% held optimistic views, leading to a Net Future Business Confidence score of -20%, marking a 2% improvement since the beginning of the year.

Reflecting a consistently grim outlook, 88% of business owners and managers believed that Pakistan was heading in the wrong direction, a sentiment echoed from previous quarters. The Direction of the Country Score dropped to -79%, a decrease of four percentage points compared to the last quarter.

In response to the economic challenges, half of the surveyed businesses increased their output prices during the quarter, albeit fewer than in the previous quarter. More businesses opted to reduce their output prices as they navigated the tumultuous economic landscape.

This survey is the 10th edition of a quarterly Business Confidence Survey conducted by Gallup Pakistan, aimed at capturing the sentiments of the business community in the country. The Business Confidence Index, used by policymakers worldwide, underlines the challenges and concerns of Pakistan’s business sector. The survey involved approximately 560 businesses from across Pakistan.

Despite the temporary respite provided by the IMF bailout, it is clear that Pakistan’s business community remains deeply apprehensive about the nation’s economic future, emphasizing the need for comprehensive measures to address the underlying issues.

 

Ghulam Abbas
Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]

2 COMMENTS

  1. the worst and dishonest trading company that I ever have had the misfortune of dealing with. They are, in my mind, criminals. I requested a withdrawal of £100,000 from my account. Within about 4 hours, the withdrawal had been put back into my account. Then my account was traded illegally with 11 trades taken and losing all the money. I complained to this company and they couldn’t give a damn. I had to reach out to oliviatrader 44 @ gmail. com to assist me in getting back my money. Glad I have all my money back now.
    WhatApp +1 (423) 248 – 2140

  2. I was scammed by one “Bill” who reached out to me via Instagram where we communicated for about 2 weeks before Bill asked to move the conversation to WhatsApp. Bill then mentioned trading in crypto assets and asked if I was interested. I agreed and Bill sent me the links and instructed me on how to create accounts on and the platform Energize Trade. With Bill’s help, I started trading Etheruem (ETH) on the Energize Trade platform. Eventually, I had made dozens of transactions, and was ready to withdraw my funds. At that point, I was told by Energize Trade customer service that I had to pay taxes first. Then I was told that because I had used another ID number (i.e., Bill’s Energize account) I would pay taxes again, this time from my own account. After that, I was told to deposit more money to increase my credit score so that I could withdraw a larger amount of funds. At this point, I realized it was a scam. I lost about $209,900 to the scam in total but the good news is that “HACKWEST AT WRITEME DOT COM ” didn’t give up on me until my money was recovered after I contacted West to help me recover my Ethereeum. I want to urge everyone out there to be careful about these people that promise high ROI; if you’re already a victim of any form of scam, you can do well to recover your funds by contacting Hack West ASAP.

Comments are closed.

Must Read

Gold price in Pakistan for today, November 08, 2024

Gold prices in Pakistan fluctuate frequently based on international market trends. The rates listed are provided by local gold markets and Sarafa Markets in...