Inflation remains top concern

Survey findings reveal Pakistanis expect economy to remain weak in next six months

ISLAMABAD:

Inflation and unemployment remain the most worrisome issues for Pakistanis as a majority of citizens also see the economy remaining weak in the next six months, a new opinion poll reveals.

But people’s confidence after touching the worst levels in the past two years now seems to be improving slightly, although a majority of the survey respondents still witnessed poor financial conditions and had low expectations for improvement.

The only positive in the new survey of Ipsos - the global market research and consulting firm - was that compared with June this year the percentage of naysayers went down slightly in September.

The survey findings revealed that consumers were still less confident and were reluctant to make investment decisions and three out of every four persons were less confident about their ability to save money and invest in their future.

People were questioned about their confidence in the economy, their opinion about the current situation compared to a year earlier, investment decisions, job prospects and the most worrying issues for them. The survey was conducted this month.

For an overwhelming majority of the respondents - 73% to be precise - inflation was the biggest concern and over two-thirds of the respondents said that unemployment was the most worrying issue.

Read Economic recovery and inflation

The coronavirus, which had crippled global and Pakistan’s economy, was third in the list of most worrying issues followed by increasing poverty, according to Ipsos.

Ipsos findings were contrary to the feel good factor that the government was trying to portray, although there was a gradual improvement in people’s sentiment about the economy.

Only one out of every five respondents said that the economy was strong but it was the highest ratio in the past two years. About half of the respondents - 43% to be precise - said that the economy was neither strong nor weak.

For the remaining 37% of the respondents, the economy was weak, according to Ipsos. For a majority of the respondents, ie 43%, the economic situation would remain weak in the next six months.

The survey findings came a day after Finance Minister Shaukat Tarin said that the economy was moving in the right direction, although the nature of meetings that the minister was holding suggested otherwise.

Pakistan’s economic conditions have remained fragile for the past many years and things have deteriorated further in the last three years. The survey findings also confirmed that the personal financial situation of people did not improve much.

Only one in four Pakistanis rates their current personal financial situation as strong, but it is the highest reading in two years. However, one-third still considers their personal financial situation weak and the remaining 41% said it was neither strong nor weak.

What should be worrisome for the government’s information and finance ministries is that a majority of the people expect that their personal financial situation will become weaker in the next six months.

The results of Ipsos research are based on primary data collected from the nationally representative sample of 1,100 people. The sample size is more than double the one used by the World Bank and the World Economic Forum for their global surveys.

An overwhelming majority of 74% Pakistanis continue to be less confident about their job security. However, for the first time in the past two years, about 26% of Pakistanis are now feeling confident about their job security - a ratio that has remained in the range of 15% to 18%.

Read Inflation likely to be over 9%

Over one-third of the respondents said that they witnessed themselves or people known to them lost their jobs in the past one year. This situation was even worse a year ago.

Also, three-fourths of Pakistanis are now feeling less confident about their ability to save money and invest in their future. However, 26% of Pakistanis are more comfortable, which is at its highest level since 2019.

In comparison to a year ago, nearly 80% of Pakistanis are feeling less comfortable about purchasing major items like cars, homes, etc. This percentage was 97% in June 2020.

The alarmingly high ratio of less confident people denies the claims made by the government that people’s purchasing power had increased and they could now afford the luxury to go to hilly areas for vacations.

Similarly, 78% of Pakistanis are feeling less comfortable while purchasing other household items.

Overall, Pakistan Consumer Confidence Index increased nine points in comparison to last year, approaching its highest level of 38.8 since 2019. But it was over 14 points less than India’s index level and 33 points below the global average.

Published in The Express Tribune, September 8^th, 2021.

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