Pakistan’s business sector is facing a severe crisis. According to the 17th quarterly Gallup Business Confidence Survey released in April 2026, private sector confidence has sharply deteriorated in the first quarter of the year. Gallup Pakistan surveyed 510 businesses across the country. The results show a massive decline in current performance, future expectations, and national direction.
Plunging Performance & Growing Pessimism
Currently, only 41% of businesses rate their operations as “good” or “very good”. This marks a steep 13-percentage-point drop from the last quarter. Furthermore, the net positive condition rate fell by 27%.
Consequently, pessimism is growing rapidly. Looking ahead, a staggering 57% of businesses expect conditions to worsen in the coming months. Only 44% remain optimistic. Net future confidence has also plummeted by 25% compared to the fourth quarter of 2025. Additionally, the perception of the country’s overall trajectory has crashed into negative territory, dropping from -8% to -32%.
Plummeting Business Confidence: Rising Costs & Energy Struggles
Businesses explicitly point to severe structural challenges. Respondents cited inflation (37%), fuel prices (25%), and taxes (11%) as the top problems requiring immediate government intervention. As a result, 73% of firms reported an overall increase in operational costs.
Energy issues are crippling daily operations. Specifically, 58% of businesses reported surging energy expenses. Moreover, 57% of respondents experienced load-shedding on the exact day of the survey. This represents a 15-percentage-point increase from the previous quarter.
Governance Concerns & Geopolitical Shocks
Confidence in economic management is fading. Currently, 46% of respondents believe governance has worsened. Only 33% see any improvement. Consequently, overall confidence in government decision-making dropped by 5% since late 2025.
Meanwhile, global events are taking a heavy toll. Middle East tensions negatively impacted 81% of businesses, primarily by driving up fuel and energy costs. If this regional instability continues over the next three months, 76% of respondents anticipate even worse conditions.
Ultimately, the business environment faces high stagnation risks. Bilal I. Gilani, Executive Director of Gallup Pakistan, concluded that domestic economic pressures and external cost shocks have created massive uncertainty. This has triggered a definitive, sector-wide shift toward pessimism.
