KARACHI: Pakistan Consumer Confidence Index (CCI) has declined sharply 19.6 percent to 70.8 points in July-Sep of 2021 (Q3 CY21), compared to 88.0 points in April-June of 2021 (Q2 CY21).
According to report issued by Dun & Bradstreet Pakistan and Gallup Pakistan on ‘Pakistan Consumer Confidence Index (CCI)’ for Q3 2021, this deterioration in sentiment is driven by weakening macroeconomic indicators, primarily increase in inflation and PKR depreciation.
The CCI report has been developed by assessing Consumers’ Confidence about the economy as well as their personal financial situation.
The Index covers four key parameters i.e., Household Financial Situation, Country’s Economic Condition, Unemployment, and Household Savings. The Index reflects ‘Current Situation’ (economic changes witnessed in the last six months), as well as ‘Future Expectations’ (changes expected for next six months) of consumers across the country.
The report said that consumers are perceiving these declining indicators as signals for further deterioration in their personal and economic conditions. Respondents reported a greater decline in Future Expectations (down by 22.7 percent) compared to Current Situation (down by 14.9 percent) in this quarter.
During the quarter under review, all CCI parameters witnessed an overall decline. Consumers’ sentiments witnessed the largest deterioration in regards to Economic Condition of the country (24.1 percent decline) due to weakening macroeconomic indicators.
Unemployment continues to drag consumers’ enthusiasm and remained the most pessimistic parameter (NI = 54.1). Unemployment situation deteriorated by 21.6 percent Q-o-Q, 68 percent of respondents believe that unemployment will increase in the next six months compared to 43 percent in Q2 2021. During Q3 2021 survey, 94 percent consumers believed that daily essentials have continued to become expensive/ very expensive in the last 6 months compared to 92percent in Q2 2021.
Commenting on the report Nauman Lakhani, country lead of Dun & Bradstreet in Pakistan the seventh issue of Pakistan consumer confidence depicts a sharp decrease in CCI Q3 2021 to 70.8, after a slight recovery in Q2 2021. Recent weakening in macroeconomic indicators such as rising inflation and currency depreciation have hurt consumer expectations. All CCI parameters declined Q-o-Q which reflects increasing concerns amongst consumers.
Bilal Ijaz Gilani, Executive Director Gallup Pakistan, said that consumer confidence has taken a turn for the worse in the latest quarterly CCI, mostly because of continued inflation in the country together with an uneven growth story emerging.
Recent government moves such as PMs Relief plan of subsidising food commodities, therefore in our assessment a right move. Whether it is enough to shore up consumer confidence, our next quarter survey would reveal, he added.
Copyright Business Recorder, 2021
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