Not since November 2014 have the consumers been lower on confidence. It has in fact been seven waves of the State Bank of Pakistan Consumer Confidence surveys, that the consumer confidence has stayed below 50, which means more negative views than positive. Previous wave conducted in March had showed some signs of hopes, as inflation had started to ease.

Then came the coronavirus. It appears the consumers, much like the businesses, also underestimated the threat the virus carries. Pakistan had already reported multiple cases by then and was moving towards a lockdown. But the consumers expected better to come. What has changed between March and May in Pakistan – is that the virus has now in proper outbreak mode, and Pakistan in top 20 countries of countries with most cases.

The dent in consumer confidence is hardly surprising given the difficulties people and businesses, big and small have faced in the lockdown days. Whether or not the consumer confidence goes up as the lockdown eases will be interesting to see, but the general consumers' behavior even at the slightest hint of easing of restriction tells, without a lockdown, the consumers may well be expressive of higher confidence.

The inflation expectation index, surprisingly, shows a higher value than previous wave – indicating more consumers see prices going up in the next six months now than they did two months ago. This is in start contrast to the inflation expectations that the central bank and economists have for the next six months – as monetary easing, suppressed demand and lower commodity prices – all signal single digit inflation in the near future.

This perhaps shows that general jitteriness makes people wary of all surroundings. Closure of business activities, employment losses and changing purchasing patterns – could all lead to a perception of higher prices. Inflation expectations have historically driven the consumer confidence. This time around it appears the fear of unemployment is the variable that is causing the confidence to shatter – as unemployment diffusion index is at the highest since July 2013 – with nearly 70 percent consumers seeing unemployment rising in the next six months.

Everything so far indicates the virus is here to stay for some time. A lot also indicates that people are unwilling to stay behind closed doors for much longer. This has already led to a virtual reopening of the entire economy. It may or may not remain the same – and that will be decided by Pakistan's Covid related deaths. Should they change for the worse – the confidence can take longer to comeback.