ISLAMABAD: Pakistan’s consumer and business confidence indices have both witnessed declines, reflecting growing concerns about inflation and the economy’s future performance.
The Consumer Confidence Index (CCI) dropped to 37.7 points in September from 40.5 points in August, signaling increased pessimism among consumers. This decline was accompanied by a rise in inflation expectations, which increased to 22.5 points in September, up from 20.3 points in August. The survey also showed that concerns about unemployment grew, rising to 70.1 points from 69 points. Expected income for households also fell to 49 points, down from 56 points the previous month.
The CCI, calculated on a scale of 0-100, assesses consumer sentiment about both the current economic situation and future expectations. A value below 50 indicates pessimism, which is consistent with the current outlook.
Meanwhile, the Business Confidence Index (BCI) also experienced a decline, dropping by 2.1 points to 55.6 in September. Conducted by the State Bank of Pakistan (SBP) in collaboration with the Institute of Business Administration (IBA), the Business Confidence Survey (BCS) revealed that both the industry and services sectors saw a dip in their respective confidence indices.
The industry sector’s BCI fell by 2.6 points to 55.3, while the services sector saw a decrease of 2 points to 55.6. The overall BCI is composed of two sub-indices: the Current Business Confidence Index (CBCI) and the Expected Business Confidence Index (EBCI).
The CBCI, which reflects business sentiment over the month, declined by 0.9 points to 54.4, while the EBCI, which measures expectations for the next six months, fell by 3.5 points to 56.6.
Inflation expectations among businesses also rose, with the Inflation Expectations Index (IE) increasing by 2.1 points to 11.7. Notably, the industry sector saw a sharp rise of 3.7 points, bringing its inflation expectations to 71.8.
Additionally, the Expected Employment Index decreased by 1.2 points to 56.1, signaling concerns over future job growth. However, the Manufacturing sector saw an improvement in its capacity utilization, with the Average Current Capacity Utilization (ACCU) increasing by 1.7 points to 66.2%.
Both the CCI and BCI reflect the challenging economic environment, with rising inflation, employment concerns, and uncertainty about the future contributing to diminished confidence across the consumer and business sectors.
