CCI declines by 2.4% in July 2023: SBP

August 04, 2023 (MLN): Consumer Confidence Index (CCI) in the country decreased by 2.4% to 35.8 points in July 2023 compared to 36.7 in June 2023, according to a survey report released by SBP.

The results of the latest Consumer Confidence Survey (CCS) showed that the decline in CCI can be attributed to a drop in the current economic conditions index (CEC) and the expected economic conditions index (EEC) by 0.3% and 4.3% respectively.

The CCI report assesses consumers’ confidence in the economy as well as their personal financial situation.

The overall CCI is calculated from survey results and evaluated within a range of 0-100, indicating an optimistic outlook when the index is above 50 while showing a pessimistic attitude towards future economic situations when it is below 50.

However, consumers expect inflation to be high as their expectations related to inflation rose by 2.5% in July 2023 as compared with June 2023. On a disaggregated level, people’s expectations regarding food inflation non-food non-energy (NFNE) for the next six months inched up by 1% and 1.3% respectively, and expectations regarding energy-related inflation rose by 0.7%.

According to the survey, consumers’ assessment of unemployment in the next six months, rose modestly by 2.8% to a reading of 73.4 from 71.4 in June 2023, indicating that consumers do not foresee the labor market gaining strength.

While, the expectations index based on consumers’ outlook (next 6 months) for interest rate, surged by 2.9% to 73.5 from a reading of 71.4 in June 2023. To note, the Monetary Policy Committee (MPC) of the central bank, recently maintained the policy rate at 22%.

Furthermore, consumers’ sentiments about the suitability of time to purchase durable goods over the next six months rose by 1.2% to 31.5 in July 2023 compared to 31.1 in June 2023.

When asked about their future income to be increased a year later, consumers’ expectations increased by 1% compared to the last survey conducted in June 2023.

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