According to the Consumer Confidence Index (CCI) released by Gallup and Dun&Bradstreet, the consumer confidence in Pakistan has dipped in the first three months of 2021. More people are now worried about economic future, unemployment and rising inflation. The surge in COVID-19 cases has already forced the government to impose restrictions to control the spread of virus.
Dun & Bradstreet’s country head in Pakistan Nauman Lakhani said the decline in consumer confidence reflected increasing concerns among the respondents about future.
The confidence of consumers in Pakistan’s economy deteriorated in the first quarter of 2021 due to toughening restrictions following a surge in Covid-19 cases in the country to contain the third wave of the pandemic.
During the Jan-Mar quarter, all consumer confidence parameters recorded a decline.
The consumer sentiment factor registered a strong deterioration as it fell 16% owing to uncertain economic conditions on account of re-imposition of smart lockdowns across the country, stated the Consumer Confidence Index (CCI) report for the first quarter of 2021.
Dun & Bradstreet Pakistan and Gallup Pakistan assessed consumer confidence in the overall state of the economy as well as their personal financial situation in their latest survey.
Inflation rate hovering at a high level of 7-8% continues to suppress the purchasing power of common consumers,” said Gallup Pakistan Executive Director Bilal Ijaz Gilani.
During the quarter under review, the household financial situation indicator was the only parameter that managed to stay above 100 points.
The index covers four key parameters, household financial situation, country’s economic condition, unemployment and household savings. The survey reflects the current economic image, impact of policies over the past six months and future expectations of consumers across the country.
The CCI ranges from 0 to 200 points, with 100 being the neutral value. A score of less than 100 indicates pessimism. The index stood at 80.8 points in the first quarter of 2021 compared to 90.3 points in fourth quarter of 2020, translating into a decrease of 10.5% quarter-on-quarter.
The weakening of consumer sentiment was driven by restrictions imposed on business operations by the government to counter the third wave of the pandemic, said the report. The prevailing uncertainty took a toll on consumers’ future expectations as the score dropped by 12%.
Consumer confidence in the current situation of the economy declined 8.3% in the Jan-Mar quarter compared to the last quarter of 2020.
Concerns over unemployment are rising to mid-2020 levels as the government continues to impose lockdowns in major cities, curtail business hours and shut schools in the wake of third wave of the Covid-19 pandemic.
“The fifth issue of Pakistan Consumer Confidence marks the beginning of calendar year 2021,” said Dun and Bradstreet Pakistan Country Lead Nauman Lakhani. “A decline of over 10% quarter-on-quarter in consumer confidence reflects increasing concerns amongst respondents.”
Also, unemployment continues to drag consumers’ enthusiasm and remains the most pessimistic parameter. Unemployment situation deteriorated as more than half respondents said unemployment would increa¬¬se over the next six months, compared to 42% in the last quarter and 39% in the third quarter of 2020. Some 92% respondents believed that essential items have continued to become expensive in the last six months compared to 93% in the last quarter of 2020.
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