KARACHI: Business confidence continued its slide in the first three months of 2023 amid multiple economic crises, according to the latest edition of the Gallup Business Confidence Index released on Friday.

“Last year’s political instability has carried over to combine with various economic crises and exacerbated business insecurity,” the report said.

Wave-9 of the survey is based on interviews with around 520 business owners conducted in the first quarter of 2023 across Pakistan. The exercise consisted of three broad strands, namely the current business situation, the future business situation and the direction of the country. Index values dropped on a quarter-on-quarter basis to an all-time low in each of the three strands.

Two-thirds of the businesses surveyed said they faced bad or worse conditions than before. There was a seven per cent increase in the number of businesses reporting “very bad” business conditions. With a fall of one percentage point from the preceding quarter, the Current Business Situation Score clocked in at -32pc.

The number of businesses saying they’d be worse off in the future increased 7pc from the preceding quarter. About 61pc businesses said their future expectations were “negative” while only 38pc expected the situation to improve. The Future Business Confidence Score worsened by 11 percentage points to -22pc on a quarterly basis.

Perceptions held by the business community about the direction of the country deteriorated from -75pc to -79pc in January-March, with as many as 90pc of the businesses saying the country was headed in the wrong direction.

Inflation remained the “most-cited problem” that most businesses (45pc) would like the government to solve. Compared to the preceding quarter, a higher number of businesses wanted the government to “help with currency depreciation” even though fewer of the same respondents believed the government should provide relief on utility prices.

The survey showed more than half (57pc) of the businesses didn’t carry out any layoffs in the quarter under review. As many as 58pc of the businesses reported raising their average output prices in the last three-month period. Of these, 45pc raised their prices between 20pc and 50pc.

A majority (72pc) of the businesses surveyed expressed concerns about Pakistan’s potential default. Of these, nearly half (49pc) showed a “significantly high concern”. About 17pc of the respondents said they weren’t concerned about the issue at all.

About 44pc of the businesses reported they faced daily loadshedding in the January-March quarter. Of those businesses that reported facing loadshedding, nearly three of every four businesses said they faced four hours or less of power outages every day.

Published in Dawn, April 8th, 2023