“…recent surveys suggest further improvement in both consumer and business sentiments…“ reads an excerpt from the central bank’s May 2025 Monetary Policy Statement. The State Bank of Pakistan appears to be in good spirits. In the previous monetary policy announcement back in March, policy rates were held steady, and the Business Confidence Index (BCI) had seen a 3 percentage point jump from the earlier reading. Fast forward to May, and the latest survey tells a more sobering tale: the BCI is now down 120 basis points from the last survey, and up by a mere 0.3 percentage points since March — hardly the kind of trend you’d cite to build a case for improved sentiment. Clearly, all eggs seem to have been placed in the national headline inflation basket — and to be fair, there are valid reasons for doing so. But there’s a difference between leaning on data and bending it to fit a preferred narrative. Truth be told, the latest Business Confidence Survey spells more warning signs than green shoots, and it’s a stretch to list it among the “key developments” influencing monetary policy direction. A closer look shows that three of the four sectors covered in the April 2025 survey report a deterioration in sentiment versus February. Manufacturing has inched forward — but by just 0.2 percentage points. Meanwhile, construction, services, and wholesale & retail have all logged moderate to significant declines. While the Current Business Confidence — which looks back over the last six months — is largely unchanged from February, the Expected Confidence for the next six months has taken a visible hit. The index is now at its lowest level since October 2024. More worryingly, inflation expectations over the same future horizon have worsened, reaching their highest point since August 2024. In the manufacturing sector, sentiment around the rupee-dollar parity is now the lowest since July 2024. Expectations for production in the next six months have slid to a six-month low, and current capacity utilization is down over 2 percentage points since February. Year-on-year, the improvement is just a shade over 1 percentage point. None of this screams collapse — but none of it suggests robust recovery either, certainly not the sort you’d highlight three times in a policy statement as a silver lining. Then there’s the MPS mention of “increasing electricity generation” as an indicator that “economic activity is maintaining momentum.” But when you’re running a marathon and still circling the track from 2018, it’s hard to call it momentum. Most generation figures remain at or below 2018 levels, and one-off growth of 3 percent year-on-year for a single month is hardly a reliable signal of sustained pickup. Finally, the MPS once again points to low-weight LSM segments, like furniture, as draggers of growth — and rightly so. The furniture sector, with just a 0.51 percent weight, has managed to wipe out nearly all the gains from the so-called “key segments” such as garments, textiles, pharmaceuticals, and automobiles. That said, one wonders what to make of non-so-key sectors — food, beverages, chemicals, cement, steel — all deep in red, and together heavier in combined weight than the celebrated ones.