Consumer confidence declines 2.4% MoM in April: SBP

April 29, 2024 (MLN): Consumers’ confidence in the country declined by 2.4% MoM or 0.82 points to 32.8 in April 2024, according to a survey report released by the State Bank of Pakistan (SBP).

The results of the latest Consumer Confidence Survey (CCS) showed that the Current Economic Conditions (CEC) index improved by 0.9 points to 31.8 while the Expected Economic Conditions (EEC) index declined by 2.5 points to 33.9 in April 2024 over the previous wave.

The CCI for urban households declined by 0.3 points to 32.7, whereas for rural households, it declined by 2.8 points to 33.3 in April 2024 over the previous wave.

The CCI of fresh households recorded a decline of 3.1 points to 31.6 in April 2024. For rotating households, it increased by 3.9 points to 35.3 in April 2024 compared with March 2024.

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.

The results show that consumers’ Inflation Expectations increased by 1.8 points to 74.5 in April 2024 as compared to the previous wave of the survey

On a disaggregated level, people’s expectations regarding food inflation for the next six months increased by 1.6%, non-food non-energy (NFNE) by 2.6% and energy-related inflation by 4.6%.

According to the April survey, consumers’ assessment of unemployment in the next six months, rose 2.2% MoM to a reading of 73.1 from 71.5 in March 2024, indicating that consumers foresee the labor market witnessing a downside.

While, the expectations index based on consumers’ outlook (next 6 months) for interest rate, went up significantly by 5% to 72.7 from a reading of 69.3 in March.

To note, the central bank’s Monetary Policy Committee (MPC) today maintained the policy rate at 22% for the seventh consecutive meeting.

Meanwhile, consumers’ sentiments about the suitability of time to purchase durable goods over the next six months rose another 5.2% MoM to 29.3 in April 2024 compared to 27.8 in March 2024.

When asked about their future income a year later, consumers’ expectations improved by 4.9% compared to the last survey conducted in March 2024.

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