Consumer Confidence Falls Sharply in Q3 FY2026
Consumer confidence in Pakistan deteriorated sharply during the third quarter of FY2026, with the latest Consumer Confidence Index (CCI) showing growing concerns over inflation, employment and household finances.
The 20th edition of the Consumer Confidence Index, released by Dun & Bradstreet Pakistan and Gallup Pakistan, recorded a reading of 65.3, down from 86.4 in the previous quarter.
The decline represents a 24.4 per cent drop and marks a two-year low in consumer confidence, reflecting a significant deterioration in how households view both their current financial position and the broader economy.
Current Sentiment Drops Into Extremely Pessimistic Territory
The latest survey shows that consumers are facing difficulties in the present as well as worrying about the future.
The current sentiment index fell to 51.8, while the future outlook stood at 78.7. Although the future outlook remains considerably stronger than current sentiment, it too declined compared with the previous quarter.
The gap between the two measures suggests that consumers retain some hope for improvement but are currently experiencing considerable financial pressure.
Inflation Remains the Biggest Concern
Inflation emerged as the most widespread concern among respondents.
According to the survey, 89.3 per cent of the 1,592 respondents said they had experienced price increases for essential goods during the previous six months.
The continued rise in the cost of necessities can directly affect household purchasing power, leaving consumers with less disposable income for non-essential spending and savings.
For businesses, weaker consumer confidence can also signal softer demand as households become more cautious about spending.
Unemployment Concerns Intensify
Employment conditions added another layer of pressure.
Around 81 per cent of respondents said unemployment had worsened over the previous six months. The figure highlights the extent to which job security and employment prospects are influencing consumer sentiment.
Concerns over unemployment can affect spending decisions even among households that remain employed, as uncertainty about future income often encourages consumers to delay purchases and increase precautionary savings.
Household Finances Offer Little Relief
Household financial expectations also remained weak.
Nearly 40 per cent of respondents expected their personal financial situation to deteriorate further over the next six months.
This suggests that pessimism is not limited to perceptions about the national economy. A significant portion of consumers also see potential deterioration in their own financial circumstances.
The combination of higher prices, employment concerns and weaker household expectations creates a challenging environment for consumer-facing businesses.
Older Consumers Record the Sharpest Decline
The deterioration in confidence was not uniform across age groups.
Respondents aged 50 and above experienced the steepest decline, with confidence falling 30.4 per cent.
Consumers below the age of 30 recorded a comparatively smaller decline, but their confidence was still significantly lower than in the previous survey.
The variation suggests that different segments of the population may be responding differently to inflation, employment conditions and financial uncertainty.
Gallup Pakistan Warns of Pressure on Consumers
Bilal Gilani, Executive Director of Gallup Pakistan, said the Q3 2026 reading of 65.3 placed Pakistan in an extremely pessimistic territory.
He described the decline as the sharpest single-cycle drop recorded by the survey in recent years and emphasized that the weakness was not limited to expectations about the future.
The current sentiment reading of 51.8, he noted, indicates that consumers are facing financial challenges in the present rather than simply worrying about what may happen tomorrow.
Businesses and Policymakers Face a Clear Warning Signal
Zubair Qureshi, Chief Business Officer at Dun & Bradstreet Pakistan, said the results demonstrate that consumers are under significant pressure.
He emphasized that confidence is unlikely to recover without visible improvements in the economic conditions affecting households.
For businesses, the CCI provides an important indicator when assessing consumer demand, market risks and spending patterns. Policymakers can also use such sentiment data to understand how economic conditions are being experienced at the household level.
Consumer Sentiment Could Shape Economic Activity
Consumer confidence plays an important role in economic activity because household expectations can influence spending, saving and borrowing decisions.
The latest CCI reading suggests that Pakistani consumers are becoming increasingly cautious amid persistent inflation and employment concerns.
While the relatively stronger future outlook offers some indication of continued expectations for improvement, the sharp fall in current sentiment shows that households remain under considerable pressure.
A sustained recovery in consumer confidence will likely depend on improvements in purchasing power, employment conditions and household financial stability.