Happiness can be fleeting, and if the adage “this too shall pass” always holds true, unhappiness would be too. Not for Pakistani consumers, it seems. At least not in the last five years. SBP’s confidence surveys for businesses and consumers suggest businesses are far more forgiving in comparison and respond rather well to improving economic indicators. In the latest rounds for October and November, businesses recorded a higher confidence level than last year, growing increasingly optimistic with time; the index is now higher than 50. Consumers are more reticent, less jittery, and more cautious. They want firmerproofs.

The macro economy seems to be moving in the direction favorable to businesses—monetary policy cuts that will bring the cost of borrowing significantly down, inflation seemingly under control, and IMF funds secured. Economic revival seems eminent, though large-scale manufacturing is still contracting. But pitting businesses and consumers against each other isn’t entirely useful. Large more established businesses have several levers they can pull to keep their heads above water. In markets where businesses enjoy positive outcomes of rent-seeking and hold significant pricing power due to protectionism and other barriers to competition, it is fairly easy for them to weather storms of the nature that the Pakistani economy is rather familiar with. Others could benefit from economies of scale, and efficiencies that minimize their risks.

Most consumers do not enjoy protection of any sort, from market structures or indirectly from the government. When times are bad, employment is in jeopardy, and buying power is severely depleted. Middle-income and lower-income households have fewer savings and spend higher shares of their income on necessary consumption. There is a noticeable difference in consumer behavior when inflation increases and incomes remain stagnant while businesses have pricing strategies in place that effectively allow them to operate without losing market share.

In recent months, inflation has certainly come down, but while businesses seem satisfied with the movement, there is a clear lag in consumers’ expectations for inflation, resulting in their lack of confidence. It is also entirely possible that consumers are not feeling the heat off them yet as far as prices are concerned. Often, when wages haven’t kept up with rising costs and taxes have increased, a decline in inflation doesn’t immediately provide the needed breathing room for consumers to regain confidence in the economy. Policy cuts are good for businesses that rely on formal credit, but consumers need more substantive steps to feel financially secure, and optimistic about the future: job security, relief in the tax burden, and disposable incomes that are higher than before. Consumer happiness can also be relative in the context of the vast inequalities and inequities that exist across the country and consumer satisfaction may depend heavily on their perception of others’ happiness.

The economy is far from being out of the woods, by any measure, and none of the economic agents would be silly enough to believe otherwise, but the incremental improvements so far have been enough for businesses to scale back their pessimism. Consumers are holding on. Maybe this too shall pass, but not for everybody.