By Ghulam Haider
The months of the political bickering coupled with fragile economic conditions in Pakistan have forced a majority of the entrepreneurs to getting increasingly pessimistic about the state of affairs of their businesses concerns as inflation reaches its highest level for 40 years.
Gallup Business Confidence Report conducted by Gallup Pakistan Survey on the current quarter of 2022 found 65 per cent of the business owners believe their businesses are in bad conditions in country while the Net Future Business Confidence score has been worsened by 50 per cent since the beginning of 2022 and is now at -10 per cent.
The slowdown in Pakistan’s economy over the last two years has been a major cause of concern for the government, which is creating a negative perception amongst different businesses. Nevertheless, the current economic scenario has sparked a wave of uncertainty across different sectors throughout Pakistan.
Revealing alarming results, the report found that as many as 81 per cent of the businesses said they do not believe the court system is fair, impartial and uncorrupted versus 7 per cent in the first quarter of 2022. More businesses from Balochistan disagree with the idea that the court system is fair, impartial and uncorrupted than any other province.
The overall decline in the index is mainly due to the deteriorating perceptions amongst the business community about the performance of the Pakistani economy vis-à-vis the polarization of the political landscape in the country.
As many as 72 per cent of the businesses surveyed reported experiencing load-shedding every day. Industrial machines businesses are doing the best out of all types of businesses, with 75 per cent of them believing that conditions are good. Cloth and garment shops are experiencing the worst level of confidence, with 81 per cent of them saying business conditions are bad.
Around one-third (32 per cent to be precise) of the businesses say that the country is headed towards a wrong direction while less than 15 per cent of businesses in Punjab, Sindh and Khyber Pakhtunkhwa believe that the country is headed in the right direction.
Gallup Business Confidence Report for the fourth quarter of 2022 paints a bleak picture. The index values are the worst since Gallup started the project in 2019, which includes Covid-19 times.
The report comes after Pakistan faced the worst floods in decades with the business community awaiting concrete and decisive measures by the government to resurrect the economy.
Similar to the findings of the survey conducted in the first quarter of 2022, the latest poll shows inflation remains the “most-cited” problem that businesses would like the government to solve by the end of this year.
A considerable increase in the number of businesses experiencing load-shedding was witnessed in the fourth quarter. About 19 per cent of the businesses facing load-shedding within a day experienced it for two hours.
This sudden change, and a 63pc fall in the Current Business Situation score, may be due to the continuous political instability over the year.
Sector-wise comparison of indices showed that the decline in business confidence is mainly coming from the retail sector which was most optimistic during the previous years. Similarly, the manufacturing sector and exporting firms have shown significantly higher pessimism as compared to the previous year.
The business survey was aimed at getting information on the amount of optimism or pessimism that business managers feel about the prospects of their companies, based upon opinion surveys on developments in production, orders and stocks of finished goods and the general economic situation of the company.
A sample of more than 700 business owners and managers across Pakistan were asked how well their businesses were doing. After Covid-19 peaked, businesses started to express greater confidence. But this confidence plummeted between the beginning and the end of 2022.