Public confidence in economy wanes
In the absence of the five-year plan or growth strategy, the Ministry of Finance, Ministry of Planning and Development and SBP often give different sets of economic projections. PHOTO: FILE
The government’s claim that the economy is getting better has collapsed suddenly as an overwhelming majority – 87% of respondents – say that the economy is heading in the wrong direction with inflation being the top most concern, according to a new opinion poll.
The Consumer Confidence Index has gone down compared to Pakistan’s own standards. It is also three times lower than in India.
Only 13% of Pakistanis think that the economy is on the right track, according to an Ipsos survey released on Wednesday.
After seeing an all-time high in September 2021, the perception of current economic situation has hit the rock bottom, with only 5% considering it to be strong, it added.
Only one out of every 10 respondents expected that the economy would remain strong over the next six months and it was the lowest ratio in the past over two years.
About one-fourth of the respondents said that they expected the economy to neither strengthen nor weaken. For the remaining 64% of respondents, the economy will weaken further, according to Ipsos.
The findings have been released three days after Adviser to Prime Minister on Finance Shaukat Tarin disclosed conditions for the revival of International Monetary Fund (IMF) loan programme, which include collecting an additional Rs525 billion in sales tax and petroleum levy that are highly inflationary.
The survey showed that inflation remained the most worrying issue for the Pakistanis, with 17% more people reporting it as a huge concern compared to the outcome of two-month-old survey conducted by the same organisation.
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. Unemployment and increasing poverty were the other two biggest concerns for the Pakistanis.
The number of people considering inflation, unemployment and poverty as the most worrying issues is on the rise. The coronavirus, which had crippled global and Pakistan’s economy, dropped to the fourth place in the list of most worrying issues, according to Ipsos.
Finance Adviser Tarin, who had been talking about achieving 6-8% economic growth until five months ago, is now saying that the economy is overheating.
The IMF has projected 4-5% economic growth, which is nearly half of what Pakistan needs to create jobs for reducing poverty and unemployment in the country.
Pakistan’s economic conditions have remained fragile for the past many years and things have deteriorated in the past three years. The survey findings also confirmed that the personal financial situation of people did not improve much.
Hardly 5% of Pakistanis rated their personal financial situation as strong during the past six months, which had been the lowest reading in two years.
Nearly half of the respondents said that their personal financial situation was weak and the remaining said it was neither strong nor weak.
For the next six months, nearly two-thirds of the respondents say they do not see any improvement in their personal finances.
The survey findings revealed that consumers were not confident and were reluctant to make investment decisions besides having doubts about saving money and investing in their future.
The results of Ipsos research are based on the 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 90% were less confident about their job security – the lowest ratio in the past over two years. About 10% of survey respondents felt confident about their job security – a ratio that had in the past remained in the range of 15% to 26%.
About 46% of respondents said that they either witnessed themselves losing jobs or people known to them were laid off in the past one year.
Also, 85% of respondents felt less confident about their ability to save money and invest in their future. The remaining 15% were comfortable, which is the lowest level since September 2020.
Compared to a year ago, about 91% of Pakistanis are feeling less comfortable about purchasing major items like cars and homes, which is the lowest ratio since August 2019.
Published in The Express Tribune, November 25th, 2021.
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