Key Points
- Future business outlook turns positive in Q2
- Current business conditions improve across sectors
- Budget concerns and inflation remain key challenges
ISLAMABAD: Business confidence in Pakistan recovered during the second quarter of 2026, with firms reporting improved operating conditions and growing optimism about the year ahead.
According to the latest Business Confidence Index released by Gallup Pakistan on Thursday, gains were made across all major indicators of business sentiment.
The survey was conducted between July 2 and July 7 among 527 businesses across manufacturing, services, construction, financial services, and wholesale and retail trade
The Current Business Conditions score improved by nine percentage points to negative 10 per cent, from negative 19 per cent in the first quarter of 2026.
About 45 per cent of respondents described current conditions as good, up four percentage points from the previous quarter.
Pakistan’s future business conditions
The greatest improvement was recorded in the Future Business Conditions score, which climbed 25 percentage points to positive 12 per cent.
It marked the first positive reading in three quarters. More than half of the businesses surveyed, 56 per cent, said they expected conditions to improve over the next 12 months.
Gallup Pakistan said the rebound in sentiment was broad-based, reflecting easing external uncertainties and a more stable macroeconomic environment.
However, businesses continued to cite inflation, power outages and concerns related to the federal budget for 2026-27 among the principal challenges facing the private sector.
The findings come a day after S&P Global raised Pakistan’s sovereign credit rating to “B” from “B-“.
The international rating agency cited stronger institutional stability and progress on reforms under the International Monetary Fund programme, underscoring improving perceptions of the country’s economic outlook.
