KARACHI: The Consumer Confidence Index (ICC) fell 19.6% quarter-on-quarter (QoQ), driven by soaring inflation and a hampered rupee, according to a report on Monday.
According to a study by Dun & Bradstreet Pakistan and Gallup Pakistan, the country’s ICC fell to 70.8 points in 3Q2021 from 88.0 points in 2Q2021.
“Consumers view these declining indicators as signals of a further deterioration in their personal and economic situation,” the report said. He added that respondents reported a larger drop in future expectations (down 22.7%) from the current situation (down 14.9%) during this quarter.
During this quarter, all CCI metrics recorded an overall decline, while consumer sentiment saw the strongest deterioration regarding the country’s economic situation (down 24.1%) due to weakening macroeconomic indicators, according to the study.
“Unemployment continues to dampen consumer enthusiasm and remains the most pessimistic parameter (NI = 54.1). He said the unemployment picture deteriorated by 21.6% in the quarter, while 68% of those polled believed unemployment would rise in the next six months, up from 43% in 2Q2021.
In the 3Q2021 survey, 94% of consumers said daily essentials were continually getting expensive / very expensive over the past six months, up from 92% in 2Q2021. According to Nauman Lakhani, country manager of Dun & Bradstreet in Pakistan, the seventh issue of the Pakistan CCI report depicts a sharp decline in the CCI in 3Q2021 after a slight recovery in Q2 2021.
“… Rising inflation and the depreciation of the currency have hurt consumer expectations. All CCI settings have decreased QoQ, reflecting growing consumer concerns, ”Lakhani said.
Bilal Ijaz Gilani, Executive Director of Gallup Pakistan, said: “Consumer confidence deteriorated in ITC’s latest quarterly report, mainly due to continued inflation in the country and the emergence of unequal growth ”. “While the manufacturing and export numbers improve, the economic situation for small traders and daily betting has not recovered, widening the gap between the beneficiaries and losers of growth. “
Gilani said recent government moves, such as the prime minister’s plan to subsidize food, in their assessment (Gallup) were a good move. “Our survey for the next quarter will reveal whether this is enough to boost consumer confidence,” added Gilani.
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.