The deterioration in sentiment is due to the weakening of macroeconomic indicators, mainly the increase in inflation and the depreciation of the PKR
ISLAMABAD – The Pakistani Consumer Confidence Index (ICC) fell sharply by nearly 20% in the third quarter of the current calendar year, mainly due to the deterioration in sentiment caused by weakening macroeconomic indicators, mainly the increase in inflation and the depreciation of the PKR.
Dun & Bradstreet Pakistan and Gallup Pakistan released their report on the “Pakistani Consumer Confidence Index (ICC)” for the third quarter of 2021. The ICC fell sharply to 70.8 points in the third quarter of 2021, from 88, 0 points in the second quarter of 2021, resulting in a 19.6% quarter-on-quarter decline. . This deterioration in sentiment is due to the weakening of macroeconomic indicators, mainly the rise in inflation and the depreciation of the PKR. Consumers perceive these declining indicators as signals of a further deterioration in their personal and economic situation. Respondents reported a larger drop in future expectations (down 22.7%) compared to the current situation (down 14.9%) during this quarter.
During the current quarter, all parameters of the CCI have experienced an overall decline. Consumer sentiment saw the greatest deterioration in the country’s economic situation (down 24.1%) due to weakening macroeconomic indicators.
Unemployment continues to dampen consumer enthusiasm and remains the most pessimistic parameter (NI = 54.1). The unemployment situation worsened by 21.6% qoq, 68% of respondents believe that unemployment will increase over the next six months, compared to 43% in the second quarter of 2021. During the survey of the third quarter of 2021, 94% of consumers believed that basic necessities continued to become expensive / very expensive over the past 6 months compared to 92% in Q2 2021.
Nauman Lakhani, Country Manager of Dun & Bradstreet in Pakistan, said: “Pakistan Consumer Confidence’s seventh issue describes a sharp decline in the CCI in the third quarter of 2021 to 70.8, after a slight recovery in the second quarter of 2021. L he recent weakening of macroeconomic indicators such as rising inflation and currency depreciation have hurt consumer expectations. All CCI settings have decreased QoQ, reflecting growing consumer concerns. ”
Bilal Ijaz Gilani, Executive Director of Gallup Pakistan, added: “Consumer confidence deteriorated in the last quarterly CCI, mainly due to continued inflation in the country and emerging growth. uneven. As big manufacturing and exporting figures improve, small traders and daily betting, the economic situation has failed to recover, widening the gap between the beneficiaries and losers of growth. Recent government measures, such as the MP relief plan to subsidize food products, are therefore, in our opinion, a good decision. Whether this is enough to boost consumer confidence, our survey for the next quarter would reveal. ”
The ICC report was developed by assessing consumer confidence in the economy as well as their personal financial situation. The index covers four key parameters, namely the financial situation of households, the economic situation of the country, unemployment and household savings. The index reflects the “current situation” (economic changes observed over the past six months), as well as the “future expectations” (expected changes for the next six months) of consumers across the country. The CCI ranges from 0 to 200, with 100 as a neutral value. A score below 100 indicates pessimism while a score above 100 indicates optimism.