Consumer confidence in Pakistan declined during the first quarter of FY2025–26, reflecting growing caution among households amid inflationary pressures and labour market challenges. However, despite the quarter-on-quarter slowdown, sentiment remains considerably stronger compared to the same period last year, indicating a degree of resilience and cautious optimism within the consumer base.
According to the 19th edition of the Pakistan Consumer Confidence Index released jointly by Dun & Bradstreet Pakistan and Gallup Pakistan, the overall index eased to 86.4 in the first quarter of FY2025–26, down from 96.2 in the previous quarter. This represents a decline of 10.2 per cent on a quarterly basis. On a year-on-year comparison, however, consumer confidence is still 18.5 per cent higher, underscoring sustained improvement relative to FY2024–25.
The Consumer Confidence Index tracks public sentiment on both economic conditions and personal financial wellbeing. It is based on four core parameters: household financial situation, national economic conditions, unemployment, and household savings. The index captures consumer assessments of the past six months as well as expectations for the six months ahead, providing insight into both current sentiment and future outlook.
The report indicates that both present conditions and expectations weakened during the quarter. Current confidence recorded a sharper decline, falling to 74.7 from 88 in the previous quarter. This drop reflects heightened concerns about prevailing economic conditions, rising costs of living, and limited income growth. Future confidence also softened, easing to 98.2 from 104.3, suggesting that while optimism persists, expectations have become more restrained.
Household financial expectations remain relatively stable compared to other indicators. Nearly 62 per cent of respondents reported that they expect their financial situation to improve or remain unchanged over the next six months. This resilience suggests that households continue to anticipate gradual stabilization, even as near-term pressures persist.
Inflation remains the dominant concern for consumers. More than 84 per cent of respondents reported an increase in the prices of essential items over the past six months, highlighting the continued impact of rising living costs on household budgets. Unemployment also remains a key challenge, with a net indicator of 56.5 pointing to sustained strain in the labour market and limited job creation opportunities.
Perceptions of Pakistan’s overall economic conditions weakened during the quarter. The index measuring views on national economic performance declined from 100.8 to 92.5, reflecting a reduction in the number of respondents expecting improvement in the near term. This shift indicates growing uncertainty around the pace and sustainability of economic recovery.
Commenting on the findings, Bilal I. Gilani, Executive Director at Gallup Pakistan, noted that the decline in confidence is closely linked to inflationary pressures and weak job sentiment. He stated that while consumers appear less positive about present conditions, expectations for the future remain relatively better. According to him, stability alone is insufficient to significantly lift sentiment, and meaningful improvement will depend on job creation and income growth.
Zubair Qureshi, Chief Business Officer at Dun & Bradstreet Pakistan, emphasized the importance of the index as a measure of market sentiment. He noted that although short-term challenges remain evident, resilience in household financial expectations provides businesses with an opportunity to adapt strategies in line with evolving consumer priorities.
The report also highlights a decline in confidence across all demographic segments. Urban respondents recorded a 24 per cent decrease, while rural respondents saw a decline of 21 per cent. The sharpest drop was observed among individuals aged 30 to 49 years, whose confidence fell by 27 per cent. Respondents under the age of 30 demonstrated relatively greater stability, with confidence declining by 17 per cent.
The survey was conducted telephonically between September and October 2025 and included 2,132 respondents. It carries a margin of error of plus or minus 2.2 per cent at a 95 per cent confidence level. Despite near-term pressures, the findings suggest that expectations around future household finances remain intact, pointing to underlying resilience within Pakistan’s consumer landscape.
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