After reaching a historic low in April 2020 Georgian consumer confidence has been steadily reviving. Covid-19 has shaken the world as well as Georgian consumers. One of the evidence that it has been an extraordinary time for Georgian consumers is that in April expectations index dropped below the present situation index for the very first time (see Figure 1). Therefore, we can speculate that negative perceptions of the present may have inflated in April due to a deep fear of the future. Hence, when people realized their expectations were not being met, they started to adjust accordingly.
In June, the overall Consumer Confidence Index (CCI) reached -36.2 points. The gap between the expectations index and the present situation index narrowed marginally compared to May. Although, the expectations index is still significantly higher, accounting for -30.9 points.
Interestingly, the gap between the present situation and expectation indices has become significantly larger in the regions, despite the present situation index having only slightly improved in June, implying there should have been less ground for heightened expectations. However, this is not execeptional, as despite their perceptions of the present, people in the regions have, in general, always been much more optimistic about the future than those living in Tbilisi (see Figure 2).
Figure 3. Change in CCI by questions
Figure 3 is yet another demonstration that consumer confidence has improved; Georgia loosened the “stay-at-home” restrictions in late May and people adjusted their perceptions of the present and future accordingly. The CCI results by questions reveal that consumers are especially positive about their current ability to save. Looking ahead, consumers are likewise more optimistic about expected unemployment, and the general economic situation in the country. Inflation is also less of a concern when compared to April (see Figure 3). Of course, appreciation of the GEL has played a role here.