The latest Gallup findings reveal that forward-looking confidence among businesses has flattened, with deep-rooted challenges—rising inflation, unreliable energy supply, and governance flaws—continuing to dominate Pakistan’s economic climate. Despite selective signs of recovery, firms report worsening conditions, shrinking workforces, and growing discontent with government policies shaped by IMF requirements.
The freshest Gallup survey unfurls a rather striking revelation: entrepreneurial confidence has climbed to its loftiest altitude in four years. Such a surge is no trifling feat, particularly when one recalls the repeated mantras of successive economic custodians, who—like their forebears—have persistently underscored the private sector as the locomotive of national expansion.
The survey, carried out between July 23 and 27 with responses from 524 businesses in manufacturing, services, and trade, revealed that 46 percent of participants rated the current government’s economic management more positively than that of the previous PTI-led administration — up from only 24 percent a year ago.
Though the index lingered slightly in the red during the second quarter of 2025, it still towered at its most sanguine threshold since the twilight of 2021. The survey remarked that this signals a tentative lessening of political and financial disquiet from the lens of commerce. Yet, one cannot ignore that comparing today’s terrain with that of 2021 is somewhat lopsided, given that both the homeland and the wider globe were shackled then by recurring waves of Covid-19, throttling economic activity with merciless severity.
Equally pivotal is the observation that a succession of Monetary Policy Statements over the past year foresaw an emergent ascent in production. The communiqué of July 31, 2025, reaffirmed this view, noting that “swift-turn indicators reveal a gradual revival.” It pointed to pronounced year-on-year surges in automobile dispatches, fertilizer uptake, credit to the private domain, inflows of intermediate commodities and machinery, as well as improvements in the purchasing managers’ index. These stirrings have begun to filter into Large-Scale Manufacturing (LSM), where output recorded annual growth in April and May, breaking a half-year spell of decline.
Yet the Finance Division’s “July Economic Update and Outlook” sketches a less flattering portrait. It registers LSM growth between July and May 2025 at negative 1.21 percent, a deterioration compared with the preceding year’s 0.86 percent. This discordant figure casts a long shadow on the exuberance of a proclaimed four-year pinnacle. Independent economists, aligning with the July MPS, contend that much of the recorded buoyancy in sales stems not from genuine output expansion but from accelerated clearance of stockpiles, thinning inventories rather than swelling production.
Nevertheless, the Gallup poll’s core insights warrant attention. Its findings, albeit tinged with contradictions from official economic digests, sketch the outlines of a business community cautiously rediscovering its confidence—even if the ground beneath remains uneven.
Forward looking confidence of the business community has plateaued and long standing challenges including inflation, energy reliability and governance remain central to the country’s business climate. Over 55 percent of businesses in the second quarter of 2024 (October to December 2024) found themselves worse off relative to the first quarter of 2024 (July-September 2024) — an observation that is baffling given that the survey was conducted 23 July to 27 July 2024 or well before the start of the second quarter of 2025 and does not include the May and April LSM data that the MPS stated as indicative of an upward trend.
Around one in five businesses (22 percent) reported having to pay a bribe in the past six months which is a decline of 4 percent in the first quarter of 2025. And concerning is the fact that more manufacturers reported having paid a bribe (25 percent) compared to service providers (20 percent) and 43 percent of businesses surveyed claimed that their workforce had decreased in the second quarter of 2025, a 9 percent further reduction from the first quarter data — a concerning statistic for the government. Around 85 percent did not consider last year’s budget as a good budget while reports backed by anecdotal surveys indicate that the numbers who do not consider 2025 budget a good one has probably risen given that the incentives — monetary, fiscal and utility tariffs — have been withdrawn as per the conditions agreed with the International Monetary Fund which is generating considerable criticism within the business community.
To conclude, granted that surveys have an experimenter bias and the questions simply support that bias yet the economy is clearly not out of the woods yet and the private sector continues to struggle with the IMF insisting on full-cost recovery of state utility companies, ending all incentives, including setting up economic zones, and implementing severely contractionary fiscal and monetary policies that are anti-growth.
While business surveys often reflect inherent biases, the broader economic picture remains clear: the private sector has yet to find stable ground. With IMF-driven austerity—ranging from full cost recovery of utilities to the removal of fiscal and monetary incentives—Pakistan’s growth outlook remains constrained, leaving businesses grappling with uncertainty rather than expansion.