Consumer confidence dips 4.1% in February

The State Bank of Pakistan (SBP) released its Consumer Confidence Survey for February 2024, revealing a 4.1% monthly decline in consumer confidence, equivalent to a 1.4-point drop. 

This decrease in the Consumer Confidence Index (CCI) was driven by a 7.9% fall in the current Economic Conditions Index (CEC) and a 0.9% reduction in the expected Economic Conditions Index (EEC).

According to SBP data, urban household confidence decreased to 32.8, a 2.3-point drop, while rural household confidence increased by 1.9 points to 27.9. 

The CCI for new households fell by 0.6 points to 31.9, and for rotating households, it decreased by 2.8 points to 31.3.

The survey measures consumer sentiment on economic conditions and personal financial situations, ranging from 0 to 100. A score above 50 indicates optimism, while below 50 reflects pessimism about future economic conditions.

The survey also noted a 1.1-point decrease in consumers’ Inflation Expectations to 72.3. 

Expectations for food inflation rose by 0.2%, non-food non-energy inflation by 1.5%, and energy inflation by 1.6%. 

The unemployment outlook improved slightly, with a 1.7% decrease to 72.8, suggesting a positive shift in labor market expectations. 

Interest rate outlook for the next six months increased marginally by 0.4% to 69.6.

Despite the central bank maintaining the policy rate at 22%, consumer sentiment on the timing for purchasing durable goods declined by 7.1% to 24. However, future income expectations rose by 1.8% compared to the previous survey.