Protests have broken out across Pakistan, with Pakistan Tehreek-e-Insaaf leaders protesting in the capital over Imran Khan’s continued imprisonment and rising electricity prices. With no immediate resolution to either issue in sight, the protests are likely to intensify.
In the midst of all this, the Shehbaz Sharif government received a fresh shock when Gallup’s Business Confidence Index report revealed that businesses were blaming the government for mismanagement of the economy.
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Prolonged political turmoil and new tax hike budgets have made business owners more pessimistic about the future, according to a Gallup report cited by The Express Tribune.
Gallup’s Business Sentiment Index surveyed 454 businesses, from small to large, and reported that scores for the current state of the economy, future state of the economy, and the direction of the country fell by 4 to 10 percent.
The survey also revealed that many companies believe that the government’s new fiscal plan for FY2025 is not business-friendly, with 85 percent of companies not considering the government’s new fiscal plan a “good budget.”
Inflation is the most cited issue in Pakistan. About 37% want the government to address inflation, which has soared to 12.6. Another persistent problem for Pakistanis is the constant interruption of electricity supply and power outages.
The survey found that six in 10 businesses surveyed said they faced significant power outages, with a 16% increase this quarter in those reporting increased outages due to increased strain on the nation’s power infrastructure during the summer.
According to The Express Tribune, retail owners have urged the government to curb hike in electricity tariffs for commercial establishments, which have soared to 77.15 Pakistani rupees per unit.
Meanwhile, concerns are growing in Pakistan’s financial sector as negotiations with Chinese authorities over extensions to repayment periods for energy sector loans are ongoing. Finance Minister Muhammad Aurangzeb met with the governor of the People’s Bank of China on July 26.
Companies and banks are anxious about the outcome of the negotiations, fearing that if they do not achieve the expected results, it could hinder future investments.
“While we believe China will not outright reject Pakistan’s request for extension of repayment deadlines for its energy sector loans, the final outcome looks bleak,” Dawn News quoted a senior banker as saying.
Meanwhile, Gallup’s survey shows that 57% of businesses are feeling pessimistic about the future, with business confidence in the future declining 36% since the last quarter and now at -14%.
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