Consumer confidence rises 6.1% MoM in March: SBP

March 21, 2024 (MLN): Consumers’ confidence in the country rose by 6.1% MoM or 1.93 points to 33.6 in March 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 2.9 points to 30.9 and the Expected Economic Conditions (EEC) index by 0.9 points to 36.4 in March 2024 over the previous wave.

The CCI for urban households increased slightly by 0.1 point to 32.9, whereas for rural households, it improved significantly by 8.2 points to 36.0 in March 2024 over the previous survey.

The CCI of fresh households recorded an increase of 2.8 points to 34.7 in March 2024. For rotating households, it increased slightly by 0.2 point to 31.5 in March 2024 compared with February 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 0.5 points to 72.7 in March 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 fell by 1.5%, non-food non-energy (NFNE) by 2.1% and energy-related inflation by 3.1%.

To note, just last month, the results showed that respondents' expectations regarding food inflation for the next six months were up by 0.2%, non-food non-energy (NFNE) by 1.5% and energy-related inflation were up by 1.6%.

According to the March survey, consumers’ assessment of unemployment in the next six months, dropped another 1.7% MoM to a reading of 71.5 from 72.8 in February 2024, indicating that consumers foresee the labor market witnessing an upside.

While, the expectations index based on consumers’ outlook (next 6 months) for interest rate, went down by 0.5% to 69.3 from a reading of 69.6 in Feburary.

To note, the central bank's Monetary Policy Committee (MPC) recently maintained the policy rate at 22% for the sixth consecutive meeting.

Meanwhile, consumers’ sentiments about the suitability of time to purchase durable goods over the next six months surged by 15.8% MoM to 27.8 in March 2024 compared to 24 in February 2024.

When asked about their future income a year later, consumers’ expectations worsened by 4.0% compared to the last survey conducted in February 2024.

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