In September 2018, the Georgian Consumer Confidence Index decreased marginally by 1 index point compared to August 2018 (from -14.2 to -15.2). Negative dynamics can be observed for the second consecutive month; however, in September, a negative change was observed, caused by a drop in the Expectations Index of 4.4 index points (from -8.7 to -13.1), while in the previous month the decrease was caused by a deterioration in the Present Situation Index, which now seems to have recovered slightly by 2.5 index points, again compared to August, from -19.8 to -17.3.
Consumers’ positive assessment of current conditions is reflected in the questions concerning saving and shopping activities. More Georgians think that now is the right time to save and make major purchases. Interestingly, more people state that their financial situation has improved; however, fewer people are able to save now compared to the previous month.
Change in the questions related to Present Situation Index, compared to August 2018
|Is now the right time for people to save in Georgia?||8.3%|
|Is now the right time for people to make major purchases in Georgia?||4.3%|
|Your financial situation, past 12 months||4.2%|
|How did the general economic situation changed in Georgia, past 12 months||2.8%|
|Your current ability to save?||-2.2%|
|How much did consumer prices rise, past 12 months||-2.7%|
Is now the right time for people to save in Georgia?
Distribution of the responses
|a very good moment to save||a fairly good moment to save||not a good moment to save||a very bad moment to save||don't know|
|Change in the responses||9.05%||-7.85%||-3.76%||-1.28%||1.69%|
As the table above demonstrates, the increase was caused by Georgians who think that now is a very good moment to save (9.05% increase in respondents). Also, with regards to the reduced share of Georgians who think that now is either not a good moment or a very bad moment to save, a 3.76% and 1.28% decrease in respondents were observed respectively.
An insignificant dip in Consumers’ optimism about the 12-month outlook was driven by questions that are related to the expected general economic situation, expected unemployment, and expected inflation in the country, while expectations about their personal well-being do not look particularly pessimistic.
Which questions are responsible for the pessimistic perceptions of Georgian Consumers with regards to the near future?
Change in the questions related to Expectations Index, compared to August 2018
|Your ability to save, next 12 months||12.5%|
|Do you expect to increase spending on major purchases compared to the past, next 12 months||3.6%|
|How will your financial situation change, next 12 months||-0.1%|
|General economic situation, next 12 months||-8.8%|
|Expected level of unemployment in Georgia, next 12 months||-12.2%|
|Do you expect prices to increase more rapidly, next 12 months?||-21.9%|
Let’s have a thorough look at the responses concerned with the question, “How do you expect the general economic situation in this country to develop over the next 12 months?”
|Get a lot better||Get a little better||Stay the same||Got a little worse||Got a lot worse||don't know|
|Change in the responses||0.00%||-5.88%||4.93%||4.91%||3.40%||-7.65%|
It is easy to see that the loss of 8.8 index points in the question is attributed to the decrease in the share of people who think that Georgia’s economic situation in the near future will get a little better, as well as to the increase in the share of people who think that Georgia’s economic situation in the near future will get a little worse and a lot worse. Interestingly, the share of people who are uncertain about the general economic situation in the country has dropped significantly.
What are Georgian Highly Educated Young People positive about?
As might have been expected, young (under 35) and highly educated consumers feel more confident than less educated and older generations. This is reflected in the average CCI performance: highly educated Georgian consumers are 20.5 index points above less educated Georgians, and the young are 18.8 index points above older consumers. It is interesting that the gap is particularly emphasized when it comes to savings and major purchases, either now or in the near future. For example, in the question “Over the next 12 months, how likely is it that you save any money?”, highly educated people score 40.66 index points more compared to less educated Georgian consumers. Similarly, young Georgians are more confident with regards to the same question compared to older Georgians (37.55 index points higher). While an in-depth analysis of these observations is well beyond the scope of this report, one could argue that they reflect trends in the overall economic development of the country which remains to be much less inclusive than desired.
|Highly educated vs The Rest||Young vs Old|
|Your ability to save, next 12 months||40.66%||37.55%|
|Is now the right time for people to make major purchases in Georgia?||33.43%||48.59%|
|How much did consumer prices rise, past 12 months||32.59%||-0.32%|
|Your current ability to save?||28.92%||22.79%|
|Do you expect to increase spending on major purchases compared to the past, next 12 months||21.78%||23.32%|
|Expected level of unemployment in Georgia, next 12 months||19.47%||13.07%|
|How did the general economic situation changed in Georgia, past 12 months||18.97%||15.65%|
|General economic situation, next 12 months||17.89%||16.00%|
|Do you expect prices to increase more rapidly, next 12 months?||14.72%||2.07%|
|Your financial situation, past 12 months||13.62%||11.20%|
|Is now the right time for people to save in Georgia?||6.03%||28.57%|
|How will your financial situation change, next 12 months||-2.03%||7.18%|