A nationally representative sample of around 350 Georgians, interviewed (every month) in early July and August 2019, reveals that overall the Consumer Confidence Index (CCI) has deteriorated by 2.4 index points since the two previous months, from -15.6 in June to -16.8 in July and to -18 in August.
Table 1 highlights a similar observable pattern in the Present Situation Index, which also declined by about 3.7 index points overall compared to June 2019 (from -17.7 in June to -18 in July and -21.3 in August). The Expectations Index, however, displayed dissimilar changes, with a decrease in July but a slight improvement by August, from -13.6 in June to -15.6 in July and -14.7 in August. Thus, the overall change in consumer confidence in July mostly correlates to the Expectations Index, where in August the opposite is the case and it relates to the Present Situation Index.
Table 1: Change in the Indices (Overall CCI, Present Situations Index, Expectations Index) in July and August 2019
|Present Situation Index||-0.37||-3.30|
It is important to discern in particular why Georgian consumers maintained unhappy expectations for July and which of those were still present in August.
Table 2, displayed below, reveals the areas affecting the deterioration of Georgian consumer confidence (in the Expectations Index) for July: expected sentiments towards savings (perhaps summertime is a poor time for saving); expected unemployment; to some extent, attitudes towards making major purchases; and the country’s general economic situation over the next 12 months (evidently the “Gavrilov effect” has played a role). It is also worthwhile mentioning that past inflation also contributed negatively to movements in July. While for August, as previously noted and shown in Table 1, the Present Situation Index forces a decline in the Overall CCI, in particular the country’s general economic situation over the last 12 months; current sentiments towards savings (summertime!); presently making major purchases; and to some extent, personal financial situations over the last 12 months, alongside past inflation
Table 2: July and August 2019, Changes in Consumer Confidence (Index Points), by Questions
|How much did consumer prices rise, over the past 12 months?||-10.48||-0.16|
|Your ability to save, over the next 12 months?||-7.64||-3.01|
|Expected level of unemployment in Georgia, in the next 12 months||-3.50||6.46|
|Your current ability to save?||-2.96||-0.88|
|Do you expect to increase spending on major purchases, compared to the past, over the next 12 months?||-1.95||-2.63|
|The general economic situation, over the next 12 months||-1.27||3.31|
|Do you expect prices to increase more rapidly, in the next 12 months?||-0.57||2.48|
|Is now the right time for people to save in Georgia?||0.84||-6.94|
|Your financial situation, in the past 12 months||1.62||-1.88|
|How will your financial situation change, over the next 12 months?||2.70||-0.80|
|How did the general economic situation change in Georgia, over the past 12 months?||4.09||-6.53|
|Is now the right time for people to make major purchases in Georgia?||4.67||-3.38|
Table 3 illustrates that the Present Situation Index, compared to June, degenerated in Tbilisi the most in July, while the other groups either experienced a slight improvement or decline, aside from the “Rest of Georgia”, which maintained an increase of 3.06 index points. While in August, compared to July, every group, without exception, experienced negative changes in their present situation; the worst being young female Georgian consumers with or without a higher education from the Rest of Georgia.
Table 3: July and August 2019, Changes in the Present SItuation Index (Index Points), by Groups
|The rest of Georgia||3.06||-5.37|
|Without higher education||-1.87||-3.51|
Table 4 shows the movements the groups encountered within the Expectations Index. In July, almost every group experienced negative changes in their expectations, aside again from the Rest of Georgia. Most notably, young, highly educated female Georgian consumers from Tbilisi were more pessimistic in their expectations in July, compared to June 2019. Yet, in August, as opposed to July, almost every group experienced positive changes in their expectations, aside from the groups from the Rest of Georgia and Without Higher Education. The specific numbers can be seen in the table below.
Table 4: July and August 2019, Changes in the Expectations Index (Index Points), by Groups
|The rest of Georgia||2.39||-1.77|
|Without higher education||-0.50||-0.40|