Key Takeaways
- Business confidence index shows recovery signs in Pakistan.
- Current business conditions improve by nine percentage points.
- Future expectations remain positive with 56% expecting improvement.
Business confidence in Pakistan is showing signs of recovery during the second quarter of 2026, according to a Gallup Pakistan survey. The Business Confidence Index, released on July 14, 2026, indicates an overall improvement across all three major components of the index.
The Current Business Conditions score improved by nine percentage points to negative 10 percent from negative 19 percent in the first quarter of 2026. Around 45 percent of businesses described current conditions as good, up four percentage points from the previous quarter.
The greatest improvement was recorded in the Future Business Conditions score, which rose by 25 percentage points to positive 12 percent for the first time in three quarters. Fifty-six percent of respondents said they expected business conditions to improve over the next 12 months.
However, despite these improvements, indicators remain in negative territory. The direction of the country score improved by 12 percentage points to negative 20 percent. Bilal I. Gilani, Executive Director of Gallup Pakistan, noted that part of the improvement appeared linked to easing external uncertainty following the resolution of the Iran-US conflict and a subsequent decline in fuel prices.
Inflation remains a significant issue for businesses, with 34 percent identifying it as the key problem they want the government to address. Loadshedding also worsened, with 72 percent of businesses reporting power outages on the day of the survey, up 15 percentage points from the previous quarter and higher than levels recorded in 2023 and 2024.
Business views regarding the Federal Budget 2026–27 remained largely negative. Thirty-nine percent of respondents rated the budget negatively, compared with 18 percent who viewed it positively. Nearly half of the surveyed businesses (49 percent) said they had low confidence in their prospects over the next 12 months due to the budget, while 36 percent expressed confidence.
Similarly, 49 percent expected the budget to increase the cost of doing business, compared with 22 percent who anticipated a reduction. On investment intentions, 34 percent said the budget made them less likely to invest or expand, while only 22 percent said they were more likely to do so.
Gilani stated, 'The recovery in sentiment hasn’t extended to the budget. Businesses are feeling somewhat better about where things stand and where they are headed, but they do not yet trust that fiscal policy is working in their favour.'
There is no doubt there is a recovery in business confidence in the country; however, indicators remain in the negative despite this recovery.
Bilal I. Gilani, Executive Director of Gallup Pakistan
The recovery in sentiment hasn’t extended to the budget. Businesses are feeling somewhat better about where things stand and where they are headed, but they do not yet trust that fiscal policy is working in their favour.
Bilal I. Gilani, Executive Director of Gallup Pakistan
