While the Overall Consumer Confidence Index remained pessimistic, consumer confidence has improved significantly vis-à-vis the last quarter.
Dun & Bradstreet Pakistan and Gallup Pakistan have recently launched the fourteenth edition of the ‘Pakistan Consumer Confidence Index (CCI) Q2 2023-24’. This publication systematically evaluates consumers’ confidence in the economy and their personal financial situation from July 2023 to September 2023. The CCI report gauges sentiments across four critical parameters i.e. Household Financial Situation, Country’s Economic Situation, Unemployment Situation, and Household Savings. The index provides insights into both ‘Current Sentiments’, reflecting economic changes experienced in the last six months, and ‘Future Expectations’, anticipating changes for the next six months. It offers a comprehensive view of consumers’ perspectives across the country, making it a valuable tool for understanding the economic landscape and how it can be expected to unfold.
Mr. Niran Rehman, Chief Business Officer of Dun & Bradstreet Pakistan stated, “I find the Consumer Confidence Index (CCI) report to be a crucial tool for various stakeholders, including Policy Makers, Development Financial Institutions, and businesses across sectors. The insights gathered from this report will not only aid in understanding the current economic landscape but also provide valuable foresight into consumer sentiments. It is particularly relevant for industries directly impacted by consumer behavior. D&B Pakistan remains committed to providing insightful data that contributes to informed decision-making in these evolving economic times in Pakistan.”
Mr. Bilal Ijaz Gilani, Executive Director Gallup Pakistan, while commenting on the findings of the report, added, “It is with satisfaction that we note that the Consumer Confidence Index continues to improve in Pakistan for a second quarter. Inflation slowing down, exports rising, and relative stability in economic policymaking seems to be driving optimism at the consumer end.”
In this survey a telephonic discussion was conducted with 1,403 respondents during October and November 2023 and thus relates to Second Quarter of Financial Year 2023-24 (FY2023-24).
The Consumer Confidence Index ranges from 0 to 200, with 100 as the neutral value. A score of less than 100 indicates pessimism and above 100 indicates optimism. The current quarter’s Consumer Confidence Index is 79.7 points, compared to 65.8 points in the previous quarter. Thus, the overall consumer confidence has alleviated from extremely pessimistic to pessimistic; the last time it was in this range was over a year ago.
About three out of five consumers were hopeful that the economic situation would either stay the same or improve in the next six months. Similar sentiments were observed regarding the Household Financial Situation improvement as well.
Despite improvements in Prices of Daily Essentials and Household Savings, employment opportunities remained a key concern. Four out of five consumers surveyed felt that the Unemployment Situation has gotten worse in the last six months; however, they were relatively more optimistic about the future with half of the consumers expecting the employment situation to get worse.
Current Sentiments of consumers (Current CCI) increased 14.2% and 13.5% in KPK and Punjab respectively, while Balochistan witnessed a lower increase of 3.8%. In Sindh, the Current CCI was 62.5, indicating a lower level of pessimism than the previous quarter.
Due to early signs of economic rebound seen in Pakistan during Jul-Aug 2023, because of the Stand-By-Arrangement with the IMF, respondents were less pessimistic about the future in all the provinces in which the survey was conducted. Future Expectations of consumers (Future CCI) improved 15.8% to 95.9. This improvement can be largely attributed to consumers’ positive sentiments relating to the country’s Economic Situation and the Unemployment Situation in the next six months compared to the current situation. However, Future CCI is still marginally in the pessimistic range.
Overall, consumers across Pakistan are relatively less pessimistic about their current Household Financial Situation than they were compared to the previous quarter. The current components of the other parameters are still in the pessimistic range. Household Income in the coming year, as expected by consumers, compared to the year before is the only parameter that is in the optimistic range with a Net Indicator of 106.4. This is a reflection of buoyant sentiments amongst consumers and, relatively, adverse conditions experienced a year earlier – in terms of the potential to earn income. –PR
