Confidence in country's economic direction rises from 12% to 18%

Proportion of Pakistanis who describe economy as 'strong' has quadrupled since first quarter, rising from 4% to 16%

Pakistanis who believe the country is heading in the right direction increased from 12% to 18%, according to a latest Consumer Confidence Index Survey report by market researchers Ipsos.

The survey, conducted through CATI interviews with over 1,000 participants from all provinces, Islamabad Capital Territory, Gilgit-Baltistan, and Azad Jammu and Kashmir, shed light on various aspects of consumer confidence and economic sentiment.

The findings from the Consumer Confidence Index Survey for Pakistan released for the second quarter of the year, offered a glimpse into the sentiments and perceptions of the country's citizens regarding the country's economic outlook.

Here is a look at the key findings:

Perception on country direction

The survey indicated that only 2 out of 10 Pakistanis believe the country is heading in the right direction, increasing from 12% to 18%, marking the highest level of optimism in the past two years. Interestingly, there's a significant gender gap in optimism, with males being twice as optimistic as females about the country's trajectory.

Economic concerns persist but improve

Economic problems continue to be a major concern for Pakistanis, with inflation remaining the most worrying issue for 30% of the population. However, this is the lowest level of concern about inflation in the last three years. Furthermore, the proportion of Pakistanis who describe the country's economy as 'strong' has quadrupled since the first quarter, rising from 4% to 16%. This is the highest positive sentiment in the last five years, except for a one-time spike in September 2021.

Improved comfort in purchases

There has been a significant increase in the comfort level of Pakistanis in making daily household purchases. The proportion of those feeling comfortable has increased from 4% to 10% since the first quarter. Additionally, there has been a nearly fourfold increase in those comfortable with making major purchases, such as homes and cars. This indicates a growing confidence in personal financial stability and the economy's recovery.

Read also: Business confidence up, but stays in negative zone

Future savings and job security

Confidence in the ability to save for the future has grown steadily, rising from 11% to 15% since September 2023. This consistent growth reflects signs of stable financial planning among Pakistanis, showing that more people are optimistic about their financial future. Moreover, confidence in job security has slightly increased to 15%, up from 12% in the previous quarter. This indicates a cautious yet positive outlook on employment stability.

Overall Consumer Confidence Index

Since the last quarter, Pakistan has shown positive changes in three out of four sub-indices, resulting in a +0.8 point change in the overall Consumer Confidence Index. The current overall index of 32.3 is the best outlook in the last three years, reflecting a gradual but steady recovery in consumer confidence.

Comparison with emerging markets

Despite these positive changes, Pakistan’s Consumer Confidence Index score remains the lowest among comparative emerging markets, including Brazil, China, South Africa, Turkey, and India. However, the signs of recovery and improvement in consumer confidence are promising, indicating that Pakistan is on a path to economic stability and growth.

Conclusion

The Ipsos Pakistan Consumer Confidence Index survey for Quarter 2, 2024, highlights a growing sense of optimism and economic resilience among Pakistanis. Despite persistent challenges such as inflation and job security concerns, the country's consumer confidence has shown significant improvement, reflecting a positive outlook for the future. The steady increase in optimism, comfort in making purchases, and confidence in saving for the future are encouraging signs of economic recovery and stability.