WITH the economy struggling to survive one of the worst crises in the nation’s history, it is no surprise that most businesses in the country are facing multiple problems. Many factories across different sectors have closed down as raw material is scarce, thanks to the restrictions imposed on imports on the back of dollar shortages. Others are cutting down production owing to poor demand caused by soaring inflation. Still others are laying off workers to stay afloat as their profits shrink. Meanwhile, the government appears incapable of guiding the faltering economy as the political crisis in the country deepens. No wonder business owners in the country are less optimistic these days about their future and the direction in which the economy seems to be hurtling, than they were three months ago. Each time some semblance of normality seems to be in sight, national events take a new and dangerous turn.

Thus, the findings of the Gallup Business Confidence Index released on Friday are not unexpected. The survey is based on interviews with the management of 520 businesses across the country, and covers the three-month period from January to March. It shows how dire and untenable the current situation has become. “Last year’s political instability has carried over to combine with various economic crises and exacerbated business insecurity,” the survey says, reporting that the index values have dropped on a quarter-on-quarter basis to an all-time low in each of the three strands including the current business situation, the future business situation and the direction of the country. The biggest confidence loss is seen in future expectations of the business owners as the ‘Future Business Confidence Score’ worsened by 11 percentage points to -22pc. The number of businesses saying they would be worse off in the future increased 7pc over figures for the preceding quarter. About 61pc of the businesses said their future expectations were “negative”; only 38pc expected the situation to improve. This conforms to the perceptions of the business community about the deteriorating path the country has taken, with as many as 90pc of them saying that Pakistan was headed in the wrong direction. Improvements in business confidence levels depend on political and economic stability. But it will take us very long to recover the losses we have suffered in the last one year even if stability returns to the country soon.

Published in Dawn, April 9th, 2023