August 19, 2022 (MLN): Pakistan’s Consumer Confidence Index (CCI) increased by 10.5% in Q1 2022 to 85.1, compared to 77 in Q4 2021, indicating an improvement in sentiments towards the performance of the new government, according to the latest report issued by Dun & Bradstreet Pakistan and Gallup Pakistan.
However, despite the improvement, the index remains in the pessimistic zone.
The consumer confidence survey measures the level of optimism that consumers have about the household financial situation, country’s economic condition, job prospects, personal finances and spending intentions.
The index ranges from 0 to 200 points where scores in the band of 0 to 99 depict decreasing levels of pessimism while scores between 101 to 200 imply increasing levels of optimism.
The survey results do not reflect the impact of the recent fuel and electricity price hikes. Therefore, an increase in prices would possibly be reflected further in the next wave.
This increase in sentiment is driven primarily by reduced pessimism for the current situation (up by 13.1% QoQ) as compared to future expectations (up by 8.9% QoQ). To note, consumers’ confidence in relation to the future situation improved on account of high expectations from the new government.
During Q1 2022, some CCI parameters- unemployment, economic situation, and household savings (Overall NI = 67.6, 85.9 and 82.8 respectively) witnessed a slight improvement while still indicating pessimism except overall household financial situation (NI=104.1) as future expectations rose by 7.9% QoQ.
As per the report, 67% of the respondents indicated that their Household Financial Situation is expected to improve or stay the same in the future (as compared to 60% in Q4 2021).
Notably, the sentiments regarding the country’s economic situation improved primarily due to an increase in future expectations by 8.9% QoQ.
Meanwhile, rising unemployment in the upcoming quarters continued to drag consumers’ enthusiasm, in comparison to all other future parameters (NI = 67.6). Around 46% respondents highlighted that unemployment will increase in the next six months (down from 54% in Q4 2021).
The report noted that the overall household savings displayed improvement in sentiments (increased by 7.2%). Future household savings are expected to be higher than the current situation.
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