From Despair to Hope: Pakistan in 2023

The country grappled with severe flooding, soaring inflation, political instability, and a delay in the IMF's standby agreement. Ipsos' Consumer Confidence Survey conducted in early 2023 revealed a staggering 94% of respondents believed the country was heading in the wrong direction. This marked the highest level of negative sentiment since Ipsos began surveying consumer confidence in Pakistan in 2019, underscoring the gravity of the situation. 

In the face of adversity, international donors rallied to support Pakistan's recovery efforts. Over $9 billion was pledged to help the nation rebound from the devastating floods. This financial aid provided a lifeline to a country battered by the natural disaster. 

The month of May brought its own set of challenges as widespread demonstrations targeted military installations, exacerbating political instability. However, Pakistan's state institutions demonstrated remarkable resilience and swiftly overcame the turmoil, preventing further escalation and fostering stability. 

Post-May, there was a glimmer of hope on the economic horizon. In July, the long-awaited IMF standby agreement was finally signed, offering a ray of hope to Pakistan's beleaguered economy. This agreement heralded a potential turnaround, offering a lifeline to an economy in need. The government of Pakistan further bolstered optimism by establishing the Special Investment Facilitation Council (SIFC) in an effort to encourage foreign investment in July. This initiative signaled an avenue for growth and development in key sectors such as IT, energy, mining, agriculture, and defense exports. These developments significantly increased consumer confidence, with 16% of consumers expressing positive sentiment (Ipsos, July 2023). This figure marked a notable improvement, being 2.5 times higher than the sentiment recorded in January. 

The momentum continued with crackdowns by the government on illicit activities like tax evasion, leading to tangible improvements, including a remarkable 10% currency appreciation within September and early October. Additionally, in October, the stock market (the KSE 100-index) reached its highest point in the last six years, underscoring the growing confidence in Pakistan's economic prospects. With elections announced for early 2024, Pakistan stands on the cusp of a new chapter, armed with valuable lessons learned from a year of trials and triumphs. 

Abdul Sattar Babar

Country Manager, Ipsos in Pakistan