ISLAMABAD: Pakistan’s Consumer Confidence Index has increased to 77.0 points in Q4 2021 (Oct-Dec), compared to 70.8 points in Q3 2021 (Jul-Sept), translating into an 8.8% quarter on the quarter increase, according to a report ‘Pakistan Consumer Confidence Index (CCI)’ for Q4 2021 jointly issued by the Dun & Bradstreet Pakistan and Gallup Pakistan on Thursday.
This improvement in sentiment is driven primarily by improvement in future expectations as respondents reported a greater increase in Future Expectations (up 13.6%) compared to the Current Situation (up 2.3%) in this quarter.
During the current quarter, all CCI parameters witnessed a slight improvement while still indicating pessimism, driven primarily by the increase in future expectations (up 13.6%) Q-o-Q. The overall increase primarily stemmed from improved perceptions regarding Household Savings (up 16.3%), the report added.
Unemployment continues to drag consumers’ enthusiasm and remained the most pessimistic parameter (NI = 55.3). Across all parameters, consumers were only optimistic regarding Future Financial Situation (NI = 109.3). During Q4 2021 survey, 91% of consumers believed that daily essentials have continued to become expensive/very expensive in the last 6 months compared to 94% in Q3 2021.
Nauman Lakhani, Country Lead of Dun & Bradstreet in Pakistan stated, “The eighth issue of Pakistan Consumer Confidence marks the end of the calendar year 2021 and completion of two cycles of CCI.
Current Consumer Confidence growth of almost 9% as compared to the sharp decline last quarter is healthy, but consumers remain in the ‘pessimistic’ zone. The slight improvement is a likely indication of normalizing demand, amidst people adapting to the ‘new normal.”
Bilal Ijaz Gilani, Executive Director Gallup Pakistan, added, “The current quarter results show improvement in overall consumer sentiment, driven largely by the improved expectation for the future.
Having said this, the overall sentiment remains in the negative with the majority rating the current and future situation of their finances to be in dire straits.
“Given the continued pressure of inflation, slow economic growth, and the disparity between small vs large and those selling to domestic vs international markets growing, the chances of sentiments improving drastically in the short term are low as well. Businesses, therefore, need to keep this current and short-term forecast in mind while planning for expansion,” he added.
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 CCI ranges from 0 to 200, with 100 as the neutral value. A score of less than 100 indicates pessimism while a score of more than 100 indicates optimism.