Consumer sentiment: Rising from the rubble

After flirting with economic freefall in recent years, Pakistan’s consumer confidence is showing signs of life.

The Q2 2025 Consumer Confidence Index (CCI) from Ipsos marks a perceptible shift in public mood: optimism about the country’s direction, perceptions of the economy, and comfort with household purchases have all inched upward. From six-year lows to six-year highs in some metrics — a swing headline writers dream of. But it’s worth asking: from where, to where?

There’s no doubt sentiment has improved since the inflation tsunami of 2023–24. Official CPI data shows year-on-year inflation has plunged to multi-year lows after peaking at historic highs just over a year ago. The relief is real — the difference between treading water and drowning. Yet while fewer Pakistanis may feel like they’re gasping for economic air, most are still a long swim from shore.

Consider the “right direction” indicator. In Q2 2025, 42 percent of respondents said the country is headed the right way — a notable recovery from previous lows. But it still means most remain unconvinced. What’s more revealing is the shift in framing. Back in February, the Q1 report declared that seven in ten Pakistanis believed the country was on the wrong track. In Q2, the headline flips the perspective: around two in five believe the country is on the right track. The numbers haven’t moved much. The lens has.

The same rhetorical pivot is visible in expectations about the economy. The Q1 survey stated that four in ten expected the economy to get weaker in the next six months. Q2’s version? Roughly two in five now expect it to get stronger. It’s the same statistical territory, packaged to suggest momentum.

Nowhere is this more evident than in the claim that “optimism has risen sharply… reaching its ever highest in 6 years.” Yet when one digs deeper, the exuberance begins to look premature. Only 29 percent of respondents actually consider the economy to be strong. Job confidence, while improved, stands at just 30 percent.

And although comfort with household purchases has risen marginally, only one in five respondents currently feel comfortable making such purchases. That’s a sobering reality, even if it’s better than the 88 percent who said they were uncomfortable a quarter ago.

To be clear, the direction of change is positive. But these are not numbers of a confident consumer class. These are numbers of a population still grappling with economic stress, expressing a cautious sigh of relief rather than any surge of optimism.

Ipsos deserves credit for presenting time-series data, allowing for trend tracking over multiple quarters. But given how the survey has evolved into fodder for headlines and podium speeches, the gaps in methodology warrant scrutiny.

The use of Computer-Assisted Telephonic Interviews (CATI) is pragmatic, and post-stratification by province, gender, and socioeconomic class (SEC) is standard. Yet the lack of detail around sampling precision, response rates, and the definitions of SECs leaves unanswered questions. There is also no mention of urban-rural balancing — a gap that matters, especially when rural respondents have repeatedly shown more optimism.

It’s understandable why the government is eager to seize this narrative. A fragile rebound is more politically palatable than stagnation.

But public policy shaped by cherry-picked numbers runs the risk of overlooking deeper vulnerabilities. Sentiment may be improving, but it is doing so from a historically low base. And the path to real economic stability remains long and uneven.

So yes, the mood is better than it was. But if this is what a “record high” looks like, it serves as a reminder of just how deep the hole was to begin with.

Copyright Business Recorder, 2025