LAHORE: The State Bank of Pakistan-led Consumer Confidence Survey July 2021 has revealed that the overall Consumer Confidence Index (CCI) has increased by 8.5 percent in July 2021 and overall inflation expectations declined by 1.7 percent in the current wave compared to the previous survey conducted in May 2021.

The Consumer Confidence Survey (CCS) is a stratified random telephone survey of households across Pakistan which was launched in January 2012 and having a two-monthly frequency. This survey is conducted by the Institute of Business Administration (IBA) Karachi and the State Bank of Pakistan (SBP). The current wave of the survey was conducted during 1st-7th July 2021; and 1,652 households were surveyed in total.

The consumer confidence and expectations is one of the leading indicators of economic activity having significant impact on business and economic conditions on an economy. These expectations are based on consumers' perceptions about the current economic conditions. Expectations regarding inflation, interest rate and employment are important for forward looking policy formulation which explains why many countries are using consumer surveys for policy making and research purposes.

This survey provides permanent direct channel to households which are major stakeholders in the economy and hence an important source of primary data. This survey is being conducted since 2012 via telephone in the first week of every odd number month.

According to the survey, a copy available with Business Recorder, an increase in CCI can be attributed to the increase in the Expected Economic Conditions (EEC) by 10.2 percent complimented by the rise in Current Economic Conditions (CEC) by 6.5 percent. It is worth noting that the consumer confidence on the CEC was down by 38.02 percent in May 2021 that has improved by 40.47 percent in July 2021. If compared with the level of July 2020, the CEC was down by 31.87 percent.

The survey has further suggested that the respondents' Overall Inflation Expectations has been reversed to 70.65 percent in July 21 against 71.68 percent in May 2021. Similarly, it was 72.99 percent in July 2020 that was higher by 1.68 percent if compared to July 2021. So far as disaggregated expectations (i.e., food, energy, non-food, non-energy) are concerned, it shows a continuation of lower inflation expectations. However, these expectations remain persistently high, it added.

Copyright Business Recorder, 2021