CCI improves by 3.2% in March: SBP

March 08, 2022 (MLN): Consumers’ confidence in the country increased by 3.2% in March 2022, indicating improving consumer sentiments, according to a survey report released by SBP.

The results of the latest Consumer Confidence Survey (CCS) showed that an improvement in Consumer Confidence Index (CCI) can be attributed to an increase in the expected economic conditions index (EEC) and current economic conditions index (CEC) by 5.9% and 0.2% respectively.

The CCI report assesses consumers’ confidence about 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.

The index reflects the ‘current situation’ — economic changes witnessed in the last six months — as well as ‘future expectations’ that take into account changes expected in the next six months across the country.

However, consumers expect inflation to decline as their expectations related to inflation declined by 2.1% in March 2022 as compared with January 2022. On a disaggregated level, people’s expectations regarding food inflation for the next six months decreased by 4.6%, non-food non-energy (NFNE) by 4.8%, while expectations regarding energy-related inflation took a dip of 3.7%.

According to the survey, consumers’ assessment of unemployment in the next six months,  declined by 6.2% to a reading of 66.6 from 71 in January 2022, indicating that consumers foresee the labour market gaining strength. Meanwhile, the expectations index based on consumers’ outlook (next 6-months) for interest rate, decreased by 3.1% to 67.7 from a reading of 69.8 in January. To note, the Monetary Policy Committee (MPC) of the central bank today maintained the policy rate at 9.75%.

Furthermore, consumers’ sentiments about the suitability of time to purchase durable goods over the next six months rose by 11.7% to 33.5 in March 2022 compared to 30 in January 2022.

When asked about their future income to be increased a year later, consumers’ expectations dropped slightly by 0.3% compared to the last survey conducted in January 2022. 

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