With the general elections in sight the political noise growing louder, Pakistani consumers, who have been at the heart of economic growth, have become conscious of their spending impulse and opt to apply restrain when dealing with real and perceived risks.

In November 2017, the Consumer Confidence Index (CCI) — conducted by the State Bank of Pakistan (SBP) and the Institute of Business Administration (IBA) — dipped by 5.91 per cent to 47.3 points from 50.3 in September.

The lowest this year, the CCI revealed an understandably grim outlook of the consumers amidst the increasingly morbid cycle of economic woes circulating daily in the media.

According to the report, the decline “is attributed to both current economic conditions index (CEC), which decreased by 5.80pc and expected economic conditions index (EEC) that recorded a decline of 6.03pc”.

This slightly pessimistic viewpoint was also mirrored in the Nielsen Global Survey of Consumer Confidence and Spending Intentions, 2017. According to it, “Pakistan consumer confidence decreased four points from the fourth quarter of 2016 but maintained above the optimism baseline at a score of 102.”

But it may not all be doom and gloom on the consumer front. Dawn’s online survey, carried out towards the end of December, shows that our readers remain optimistic, albeit cautiously, about the upcoming year.

Of the 1,522 respondents, 57.8pc were of the view that the economy would perform favourably next year. Despite perceived economic conditions, only 7.7pc people considered things to take a turn for the worst in the following 12 months.

Among those polled, 59pc are entering 2018 positive about improvements in their personal financial situation, while 16.5pc thought things would more or less remain the same.

It must be conceded that these sanguine souls seem to have pitched their hopes on any changes the election might bring. 59.9pc are looking towards Pakistan Tehreek-e-Insaf (PTI) and its promised “revolution” to uplift the economy. However, 29.8 pc still remain confident about the current government, Pakistan Muslim League- Nawaz (PML-N) and its economic policies.

But are consumers feeling guarded when it comes to the terse political environment in the wake of upcoming elections? The survey discloses that 38.1pc of them would not consider it wise to spend on big household expenses next year, while a remaining 27pc were uncertain.

Interestingly, though people claim to limit their expenditure, retail patterns paint a different picture. “It’s very amusing, but in our country the normal everyday consumer is not concerned with elections. Economic growth and political stability are two different things. Political stability is not affecting consumer buying patterns.” said Yousuf Jamshed, CEO of LXY Global.

“Buying continues but people readjust themselves according to uncertainty. They slow down their buying and invest more.”

Restricting expenses to household items may be the obvious pragmatic choice after the currency devaluation. “Whenever the currency is devalued, prices of essential items go up. A 10-15pc increase has already happened. As currency is further devalued, prices will keep going up.” said Kawkab Iqbal of Consumers Association of Pakistan.

Perhaps it is the result of positive projections by the International Monetary Fund and World Bank, or the oft-cited impending opportunities of the China-Pakistan Economic Corridor, but people appear to blithely regard their own job prospects. 57.6pc of a largely working age claimed they were ‘optimistic’ about job prospects, of which 38pc were millennials.

Forming two-thirds of the population, the millennials are a force to be reckoned with. Referencing Market research provider, Euromonitor International, Bloomberg alleges “135 million millennials” are behind the shifting financial trends of the country.

What has altered the general attitude of distrust in the economy? Consumers and investors alike gaze at clearing market horizons.

Euromonitor International’s report Consumer Lifestyles in Pakistan states “Consumer confidence has been boosted by improving security and rising levels of disposable income”. A fact corroborated by the Overseas International Chamber of Commerce and Industry’s annual security survey for 2017; it cited a 69pc reduction in street crimes, and 90pc decline in high-intensity crimes.

With an emergent middle class, growing income, and a youth bulge- aspirant of their prospects- perhaps 2018 may not be as dire as some like to predict it to be.

Published in Dawn, The Business and Finance Weekly, January 1st, 2018