ISLAMABAD: Business owners in Pakistan have voiced increasing concerns over economic mismanagement amidst mounting inflation and tax burdens, labeling Prime Minister Shehbaz Sharif’s government as ineffective stewards of the economy, according to a recent Gallup Pakistan survey.
Conducted in the second quarter of 2024 across more than 30 districts, the survey of 454 small, medium, and large businesses revealed a stark decline in confidence across all aspects of the Business Confidence Index. Scores related to the current business situation, future business outlook, and the overall direction of the country plummeted by 4-10%.
A significant majority of respondents criticized the government’s fiscal policies for FY25, describing them as detrimental to business interests. Nearly 40% of businesses identified inflation as their top concern, exacerbated by a 12.6% inflation rate in June, which has severely impacted consumer purchasing power.
More than half of Pakistan’s businesses, 54%, believe that the current government is worse at managing the economy compared to its predecessors.
Bilal Ijaz Gilani, executive director at Gallup Pakistan, highlighted that continued political uncertainty and the recent imposition of heavy taxation in federal and provincial budgets have deeply affected business sentiment nationwide. He noted that regulatory measures and increased taxes have compounded the challenges faced by businesses.
The survey also indicated a surge in businesses seeking government intervention on taxation issues, reflecting widespread discontent with the economic policies outlined in the latest budget.
Additionally, concerns over infrastructure weaknesses were evident, with 61% of businesses reporting frequent power outages, exacerbated by increased power demand during the summer months.
Overall, the survey painted a pessimistic outlook among business owners, with a majority expressing negative expectations about the future. The net future business confidence score saw a significant 36% decline from the previous quarter, underscoring growing uncertainties within the business community.
“Given the challenging economic environment, there is a pressing need for the government to heed the concerns of businesses and take proactive steps to address their grievances,” Gilani emphasized.
