Dun & Bradstreet Pakistan and Gallup Pakistan have issued their third report on ‘Pakistan Consumer Confidence Index (CCI)’ for Q3 2020. 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 is a reflection of ‘Current Situation’ (economic changes felt in the last six months), as well as ‘Future Expectations’ (changes expected for next 6 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. The CCI was 88.7 points in Q3 2020, compared to 79.1 points in Q2 2020, translating into 12.1% q-o-q increase. However, the overall consumer confidence in Pakistan has remained pessimistic in all three quarters of 2020. This was driven by optimistic Future Expectations in Q3, up 15.3% q-o-q, amidst complete lifting of lockdown and normalcy in trade activities.
Mr. Nauman Lakhani, Country Lead of Dun & Bradstreet in Pakistan stated, “The third issue of Pakistan Consumer Confidence report compares changes in Consumer Confidence from Q1 2020 (pre-COVID times), Q2 2020 (during smart lockdown) and Q3 2020 (complete lifting of lockdown). Current Consumer Confidence growth of 7% as compared to the last quarter is healthy; showing signs of recovery in Pakistan. I envision this Index to become a barometer of economic well-being in the Country in the years to come. We hope this report is useful to government entities, as well as private organizations to strengthen their understanding of consumers sentiments across Pakistan and help in developing effective strategies to deal with the on-ground situation.”
Mr. Bilal Ijaz Gilani, Executive Director Gallup Pakistan while commenting on the findings of the report added, ‘Consumer Confidence in Pakistan has shown upward trajectory for a third quarter in a row which shows that impact of COVID-19 on economy and consumers is slowly tapering off. Gallup Pakistan foresees two main threats to this recovery trend: unemployment and inflation. If both are not effectively tackled, many of the recent wins may be lost. Now is the time for fiscal and monetary policy instruments for public welfare’
Perceptions about the Country’s Economy have improved consistently across all three quarters of 2020, highlighting upbeat consumer sentiments mainly on account of optimistic Future Expectations. Perception about Household Financial Situation entered into green implying people’s household income seems to be rising after a decline due to COVID-19. During Q3, Household Financial Situation was the only CCI parameter to turn overall optimistic owing to improvement in Future Expectations. While 30% consumers believe that their income levels will improve in the next 6 months in Q3 compared to 28% in Q2 and 32% in Q1.
In contrast, rising Inflation and more importantly Unemployment continues to drag consumers enthusiasm. During Q3 survey, 91% consumers believed that daily essentials have continued to become expensive / very expensive in the last 6 months compared to 83% in Q2. While, 4 out 5 (77%) respondents believed that Unemployment has increased in the last six months as compared to 80% in Q2 and 71% in Q1. Consequently, 2 out of 3 (66%) respondents cited a decline in Household Savings over the last six months compared to 64% in Q2 and 57% in Q1. On the whole, consumers across all provinces, location (Urban and Rural), different age groups and genders were relatively more optimistic for future economic situation, than they were during Q2 2020 survey.