Confidence in economy retreats: Ipsos survey

Inflation and unemployment were top-most concerns for Pakistanis, while confidence in the economy retreated, showed the Ipsos Consumer Confidence Index Survey for the third quarter (July-September) of 2022.

Between 7 and 12 September, 1,086 Pakistanis were asked to complete the survey, which considered factors such as future outlook, current state of economy, job security, financial position and unemployment.

Some 40% respondents said inflation was the most worrying issue in Pakistan, while 11% said it was unemployment and 10% said it was floods.

Increase in electricity prices (7%), increasing poverty (6%) and burden of additional taxes (5%) were also concerns.

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The survey results come at a time when Pakistan’s economy is reeling from a crisis owing to persistent uncertainty which has hammered the value of rupee against the US dollar amid decline in foreign exchange reserves. Moreover, the recent increase in electricity and gas prices has also lifted inflation to historically high levels.

Consumer Price Index (CPI)-based inflation hit 27.3% on a year-on-year (YoY) basis in August 2022, compared to 24.9% in the previous month and 8.4% in August 2021, revealed data from the Pakistan Bureau of Statistics (PBS).

Moreover, with the rise in taxes and cost of living, businesses are expected to slash their workforce. Adding fuel to the fire, the devastating floods in the country has added to the woes of the public and triggered further problems.

Economy ‘heading in the wrong direction’

When asked about the state of the economy, 91% of the participants held the view that Pakistan was headed in the wrong direction, signalling the least confidence level since August 2019. Just 9% believed that the country was getting back on track, down from 34% at this time last year.

Moreover, 61% of the respondents rated the economy as weak, compared to 37% in September 2021, while just 3% rated it as strong. The remaining 36% believe Pakistan was neither weak nor strong.

An overwhelming majority, 77% Pakistanis, foresaw the economy of their localities to worsen in the near future.

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Worries about financial status

The report also showed a sharp decline in people perceiving their financial status as strong: 3 in 5 (or 61%) Pakistanis rated their current financial situation as weak.

The Ipsos survey also painted a gloomy picture of the future given that 75% of the respondents expected their personal financial situation to get worse. Around 93% of the people were also worried about their ability to invest in the future.

A whopping 95% respondents were less comfortable to make a major purchase at this moment, compared to the previous year.