The perceptions of consumers about the economy are presented through four composite indices:

(i)	Current Economic Conditions (CEC) index, which is the average of diffusion indices of the following three questions:

(a
	How do you assess present financial position of your family compared to the last six months?
(b
	How do you assess present general economic condition of the country compared to the last six months?
(c
	In your opinion, compared to the last 6 months, how do you see the current time for buying durable goods such as furniture, refrigerator, television etc.?

(ii)	Expected Economic Conditions (EEC) index; which is the average of diffusion indices of the following three questions:

(a
	How do you expect your financial position to change over the next six months from now?
(b
	How do you expect general economic conditions in the country to develop over the next six months from now?
(c
	What do you think unemployment over the next six months from now?

(iii)	Consumer Confidence Index (CCI); which is the average of CEC and EEC, as above.

(iv)	Inflation Expectations Index (IEI); which is the diffusion index of the following question about prices:
	How do you expect that prices in general will develop over the next six months from now?

Rotating Panel:
The sample of the survey consists of a rotating panel with 33 % of respondents are those households which were surveyed six months earlier, while the remaining 67 % are the fresh. The stratification scheme of the survey is implemented in rotating panel too.

Index Calculation
SBP reports results of households, businesses and other perception surveys in the form of Diffusion Index (DI). The Diffusion Index shows the general tendency of respondents about a certain aspect of a particular survey. The questionnaire for this survey offers five types of options to the respondents for each question.

(i) PP= Increase/improve significantly;
(ii) P = Increase/improve;
(iii) E = Unchanged/neutral; (iv) N = decline /deteriorate; and
(v) NN = decline/deteriorate significantly.

On the basis of these five options, the Diffusion Index is computed in the following two steps:

Step 1: Net Response (NR) is computed as below:
NR = (1.00*PP) + (0.50 x P) + (-0.50 x N) + (-1.00*NN).

Step 2: Diffusion Index (DI) is computed as follows:
DI = (100 + NR) / 2

Where DI ranges from 0 to 100; interpretation of which is as follows:

DI > 50 indicates that Positive views are more than Negative views;
DI = 50 indicates that Positive views and Negative views are equal;
DI < 50 indicates that Positive views are less than the Negative views.