The CCI is getting back on track. The highly anticipated decline observed last month has been reversed. The Consumer Confidence Index has increased from -32.5 in October to -31 in November (by 1.5 index points). Both the Present Situation and Expectations Indexes have slightly improved – with the Present Situation Index increasing by 1.1 index points and the Expectations Index by 1.6 points (Chart 1).

In November, one major contributor to the observed rise in consumer confidence was people’s higher readiness to purchase durable goods in the current period, alongside greater expectations for such purchases over the upcoming 12 months. The same is true for the readiness to save in the current period. In essence, the delayed demand that appears to have been temporarily held back during October is coming back.

Although the CCI slightly improved, inflation keeps dragging it down. Thus, high prices have a considerable negative impact on consumer sentiment. The pandemic situation is not helping either, with the number of COVID cases as well as the death rate peaking in November.

One interesting trend observed in recent months relates to present household financial standing. According to the data, the financial situation has improved, as the share of respondents reporting that they make ends meet has risen (Chart 2).

Although the overall CCI has strengthened, the Present Situation Index for the rest of Georgia has moved slightly downwards, unlike the trend seen in Tbilisi (Chart 3). For Tbilisians, the increase in readiness to make major purchases of durable consumer goods overshadows negative sentiments about consumer prices. Across the rest of Georgia, there is a higher readiness to save, however, increased consumer prices have a stronger negative impact on the CCI in the regions.