The second half of 2017 lacked any drama, at least as far as Georgian consumer confidence (CCI) is concerned. During this period, the CCI moved within a very narrow band of [-16; -20] index points, with monthly changes not exceeding one or two points. This trend continued in January 2018 – the CCI lost 1.1 index points, declining from -17.8 in December to -18.9 index points in January 2018. CCI’s two sub-indices, capturing consumer expectations and present situation assessment, moved in the opposite directions. The Present Situation Index climbed 1.9 to -23.6 index points; the Expectations Index, on the other hand, lost a more significant 4.3 index points to -14.3.
REST-OF-GEORGIA FALLS FAR BEHIND TBILISI, AND STAYS THERE!
While Georgian CCI is rather stagnant on average, what does stand out is the very significant gap in consumer confidence between people living in Tbilisi and everybody else. This gap emerged in September 2016 and has been a permanent feature of Georgia’s economic landscape ever since. In January 2018, this gap widened to 11.7 index points, very close to the peak of 12.2 index points achieved in September 2017. Interestingly, while temporarily catching up in October 2017 (probably encouraged by young wine festivals, Rtveli, across Georgia’s regions), Georgia’s villages and small towns have been falling further and further behind Tbilisi for 3 consecutive months. This is a worrying trend which we will continue monitoring in the coming months.
BARELY SURVIVING, BUT OPTIMISTIC…
Analysis of answers to specific questions in the survey reveals some interesting patterns. Outside Tbilisi, people are (much) more negative when it comes to all 6 questions concerned with the past and present situation – whether from their personal or general perspective.
Conversely, the same people appear to be relatively more optimistic that their personal lot and a lot of their countrymen will improve compared to their (very modest) present situation. Their responses are more positive on 4 out of 6 questions concerned with the future. The two future-oriented questions on which non-Tbilisi Georgians are less optimistic than Tbilisians are those concerned with personal savings and the general level of unemployment. Apparently, to have a job and to be able to save are the most challenging aspects of life in Georgia’s small towns and villages
The gap in consumer confidence, in index points, Tbilisi vs. Rest-of-Georgia, January 2018, sorted by size of the gap
|* Your current ability to save?||29.4|
|Expected level of unemployment in Georgia, next 12 months||25.1|
|* Is now the right time for people to make major purchases in Georgia?||23.6|
|* Your financial situation, past 12 months||23.0|
|* Is now the right time for people to make major purchases in Georgia?||20.2|
|* How much did consumer prices rise, past 12 months||20.1|
|* How did the general economic situation changed in Georgia, past 12 months||17.5|
|Your ability to save, next 12 months||11.5|
|Do you expect to increase spending on major purchases compared to the past, next 12 months||-1.7|
|General economic situation, next 12 months||-4.1|
|How will your financial situation change, next 12 months||-10.1|
|Do you expect prices to increase more rapidly, next 12 months?||-14.0|
Underlined questions are concerned with the respondent’s personal situation;
(*) denotes questions concerning the past and present situation