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FEBRUARY 2020: PRESENT SITUATION DRIVES GEORGIAN CONSUMER CONFIDENCE UP
30 March 2020
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A nationally representative sample of around 350 Georgians, interviewed in early February 2020, shows that the Consumer Confidence Index improved by 0.9 index points, from -20.4 in January to -19.5 in February, which could be because consumers usually pull back in January after spending fairly more during the Christmas celebrating season. Nevertheless, it is worth noting that it is not a usual practice to observe a positive variation in February in the consumer confidence figures in the previous years. The two sub-indices, capturing consumer expectations and present situation assessment, also demonstrated improvement. Present Situation Index increased by 1.6 index points, from -23.6 in January to -22 in February. Its complement, Expectations Index, added slightly, by 0.2 index point, rising from -17.2 in January to -17 in February. So, Georgians seem to be a bit more optimistic in February due to the Present Situation Index increase. It should also be noted that consumer confidence interviews were conducted in early February before coronavirus spread beyond China to other countries such as South Korea, Iran and Italy, notably before it reached to South Caucasus and darkened the outlook. Therefore, consumer confidence figures for February miss much of any concern about the coronavirus.

Based on the questions asked during the interviews, below we present Table 1 that shows which particular questions caused the increase in Georgian Consumer Confidence in February 2020.


Table 1: February 2020, Changes in Consumer Confidence (Index Points), by Questions

How will your financial situation change over the next 12 months? 6.5
Do you expect to increase spending on major purchases compared to the past, over the next 12 months? -2.6
Your ability to save over the next 12 months -3.0
General economic situation over the next 12 months -0.2
Do you expect prices to increase more rapidly over the next 12 months? -1.2
Expected level of unemployment in Georgia over the next 12 months 1.5
How did the general economic situation changed in Georgia over the past 12 months? -3.2
How much did consumer prices rise over the past 12 months? 1.8
Is now the right time for people to make major purchases in Georgia? -4.4
Is now the right time for people to save in Georgia? 7.3
Your current ability to save? 1.6
Your financial situation, over the past 12 months 6.4
Note: Questions in red stand for present situation


Table 1 exhibits that in February Georgian consumers are positive about their personal financial situation and saving ability at present. As mentioned in the first paragraph, on average, Expectations Index remained nearly at the same level, nevertheless Table 1 shows that Georgian consumers are not only optimistic about their personal financial situation at present, but also in the future, in the next 12 months. It is reasonable to assume that this has to do something with the upcoming touristic season, which usually starts since March. As consumer confidence data allows us to observe changes regarding all the twelve questions by groups such as Tbilisi and Rest-of-Georgia, Male and Female, “Young” (less than 35 years old) and “Old” (greater than 35 years old), consequently we can make inferences which groups were more optimistic concerning consumer confidence questions for the current month. As can be seen in Table 2, expectations increased regarding the forecast for personal finances over the next 12 months for Tbilisians, as well as for the Rest-of-Georgia population. Afterwards, concerning present situation, we observe the largest positive variation in the questions Is now the right time for people to save in Georgia?” and “How has the financial situation of your household changed over the last 12 months?” for both groups, Tbilisi and non-Tbilisi population. The same observations are true also for males and females (see Table 3).


Table 2: Tbilisi vs. Rest-of-Georgia: February 2020, Changes in Consumer Confidence (Index Points), by Questions

  Tbilisi Rest of Georgia
How will your financial situation change over the next 12 months? 4.2 7.7
Do you expect to increase spending on major purchases compared to the past, over the next 12 months? -6.3 1.0
Your ability to save over the next 12 months 0.0 -5.7
General economic situation over the next 12 months -5.3 4.3
Do you expect prices to increase more rapidly over the next 12 months? 4.3 -7.7
Expected level of unemployment in Georgia over the next 12 months 4.2 -0.5
How did the general economic situation changed in Georgia over the past 12 months? -1.3 -5.7
How much did consumer prices rise over the past 12 months? 2.0 4.2
Is now the right time for people to make major purchases in Georgia? -2.8 -5.3
Is now the right time for people to save in Georgia? 8.8 6.2
Your current ability to save? 2.3 2.0
Your financial situation, over the past 12 months 7.0 5.6
Note: Questions in red stand for present situation


Although February appeared to be a better month in terms of consumer confidence, it is also important to pay attention on the heightened worries of Georgian consumers for the current month. Numbers (see Table 2) reveal that Tbilisians are mainly not confident about making major purchases and general economic situation of the country over the next 12 months. Whereas non-Tbilisi population, in expectations, is pessimistic about their saving abilities and inflation, and, at present, concerned about making major purchases and general economic situation of the country.

When looking at the figures for males and females in February, males demonstrate better results in terms of consumer confidence. The Present Situation and Expectation Indices, for the latter group, rose by 4.2 (from -25.9 in January to -21.7 in February) and 3.3 (-19.5 in January to -16.2 in February) index points, respectively. Yet, both sub-indices declined for the complement group, females; the Present Situation index by 0.3 index point (from -22 in January to -22.3 in February) and Expectations Index by 2.2 index points (from -15.4 in January to -17.6 in February). Table 3 further explains by questions and confirms that females performed worse than males in terms of consumer confidence. In expectations, females are mainly pessimistic about their ability to save, making major purchases and the general economic situation of the country. At present, their main concern is again making major purchases and also they are anxious about the general economic situation of the country.


Table 3: Male vs. Female: February 2020, Changes in Consumer Confidence (Index Points), by Questions

  Male Female
How will your financial situation change over the next 12 months? 7.7 5.6
Do you expect to increase spending on major purchases compared to the past, over the next 12 months? -0.6 -4.2
Your ability to save over the next 12 months 8.9 -12.0
General economic situation over the next 12 months 4.6 -3.8
Do you expect prices to increase more rapidly over the next 12 months? -3.7 0.7
Expected level of unemployment in Georgia over the next 12 months 3.0 0.3
How did the general economic situation changed in Georgia over the past 12 months? 0.5 -5.9
How much did consumer prices rise over the past 12 months? -3.2 5.5
Is now the right time for people to make major purchases in Georgia? 13.8 -18.2
Is now the right time for people to save in Georgia? 8.0 6.8
Your current ability to save? -1.3 3.8
Your financial situation, over the past 12 months 7.4 5.6
Note: Questions in red stand for present situation


MONTHLY AND YEARLY CHANGES IN THE CCI VARIABLES



BAR CHARTS: CONSUMER RESPONSES BY QUESTIONS
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