LAHORE: Consumer confidence in Pakistan further deteriorated during the period between January and March this year, primarily owing to the restrictions renewed by the government to stop the rising Covid-19 infections that heralded the third wave of the pandemic in the country.
The major worry concerned the survey respondents the most was loss of jobs as the government imposes smart lockdowns in the major cities, curtails business hours and shuts schools in the wake of the third wave of Covid-19, while higher inflation continues to eat into the purchasing power of consumers.
The findings of the Pakistan Consumer Confidence Index (CCI) released by Dun & Bradstreet Pakistan and Gallup Pakistan suggested that consumers were more anxious about the future rather than the current situation.
“Consumers reported a greater decline in the future expectations owing to the prevailing uncertainty, compared to the current situation. The deterioration in consumer sentiment is driven by curbs placed on business operations by the government to counter the third wave of the pandemic,” the survey report contends.
The CCI report has been developed by assessing consumers’ confidence in the economy as well as their personal financial situation. The index covers four parameters: household financial situation, economic conditions, unemployment, and household savings. It is a reflection of the current situation — economic changes felt in the previous six months, as well as future expectations or changes expected in the next six months.
The CCI ranges from 0 to 200, with 100 as the neutral value. A score of less than 100 indicates pessimism. The CCI was 80.8 points in the first quarter of this year, compared to 90.3 points in the last quarter (October-December) of 2020.
Dun & Bradstreet’s country head in Pakistan Nauman Lakhani said the decline in consumer confidence reflected increasing concerns among the respondents about future.
During the current quarter, all CCI parameters witnessed an overall decline. Consumer sentiments witnessed the largest deterioration with regards to the economic condition of the country on account of resumption of smart lockdown. Household financial situation was the only CCI parameter that managed to stay above 100 points in spite of decreasing for the first time since the first quarter of 2020.
Also, unemployment continues to drag consumers’ enthusiasm and remains the most pessimistic parameter. Unemployment situation deteriorated as more than half respondents said unemployment would increase over the next six months, compared to 42pc in the last quarter and 39pc in the third quarter of 2020. Some 92pc respondents believed that essential items have continued to become expensive in the last six months compared to 93pc in the last quarter of 2020.
Published in Dawn, April 30th, 2021