Pakistan consumer confidence slips in FY26's first quarter amid inflation, job concerns

Consumer confidence in Pakistan fell sharply in the first quarter of fiscal year 2025-26 as inflation and unemployment continued to weigh on households, according to a new survey released by Dun & Bradstreet Pakistan and Gallup Pakistan.

The 19th edition of the Consumer Confidence Index dropped to 86.4, down from 96.2 in the previous quarter, marking a 10.2% decline. Despite the quarterly drop, confidence was still 18.5% higher than the same period last year, indicating an improvement on a year-on-year basis.

The index measures consumer perceptions across four indicators: household financial situation, national economic conditions, unemployment and savings. Both current sentiment and expectations for the future weakened during the quarter.

Current confidence fell sharply to 74.7 from 88 in the previous quarter, while future confidence eased to 98.2 from 104.3, suggesting that while consumers remain cautiously optimistic, short-term pressures are intensifying.

Inflation emerged as the dominant concern, with 84% of respondents reporting price increases for essential goods. Unemployment also remained a major challenge, reflected in a net unemployment indicator of 56.5, highlighting continued strain in the labor market.

Perceptions of Pakistan’s overall economic situation declined as well, with the index falling to 92.5 from 100.8. Fewer respondents now expect economic conditions to improve over the next six months.

Household finances, however, showed relative resilience. About 62% of respondents said they expect their financial situation to remain stable or improve in the coming months.

Bilal I. Gilani, executive director of Gallup Pakistan, said the decline reflects persistent inflation and weak job sentiment. “People are less upbeat about the present, but they still expect the future to be better,” he said. “Stability has helped, but without real economic growth, consumer sentiment will not rise much further. People are waiting for jobs and income to grow before they fully believe in a recovery.”

Zubair Qureshi, chief business officer at Dun & Bradstreet Pakistan, said the index remains an important gauge of market sentiment. “While short-term challenges persist this quarter, the resilience in household financial expectations signals that businesses have an opportunity to align strategies with evolving consumer priorities,” he said.

Confidence declined across all demographic groups. Urban respondents recorded a 24% drop, while rural confidence fell 21%. The steepest decline was seen among respondents aged 30 to 49, where confidence fell 27%.

The survey was conducted by telephone between September and October, covering 2,132 respondents nationwide.