October 2015 | Consumer Confidence Rebounds on Expectations of Greater Stability
10 November 2015

October CCI data suggest that consumers are finally sensing the end of the economic turbulence through which Georgia has been ploughing the last 12 months. Driven by a strong improvement in expectations, the CCI added 4.1 points, to reach -36.2 points. While assessment of the present situation remained fairly stagnant (up 2 points), consumer expectations soared (up 6.3 points).


Our October 2015 survey included a number of questions about people’s indebtedness in GEL and USD. This allowed us to establish the degree to which consumer confidence is affected by the debt burden and lari devaluation. As might have been expected, we find that people carrying USD loans (about 13% in the population) are almost 8 points lower on CCI than those with GEL loans (42% in the population). The latter are, in turn, 5 points lower on CCI than those who don’t carry any debt at all.

Naturally, heavily indebted individuals (about 20% in the population who spend more than 50% of their income on monthly debt service payments) are particularly insecure. Their CCI is more than 16 points below those with no debt. Surprisingly, consumer confidence levels individuals with total service debt ratios below 50% are hardly distinguishable from those carrying not debt at all.


Consumers are less concerned about their present situation:

  1. The share of people reporting a worsening in the financial situation of their households over the past 12 months decreased m/m to 45% from 56%;
  2. The share of people thinking that the general economic situation in Georgia had worsened over the past 12 months decreased m/m to 57% from 70%.

Similarly, people expect greater stability in prices, jobs and Georgia’s general economic situation:

  1. The share of those expecting the general economic situation to worsen decreased m/m to 17% from 24%;
  2. The share of those expecting prices to remain stable increased m/m to 29% from 18%;
  3. The share of those expecting unemployment to increase decreased quite dramatically m/m to 32% from 45%.

Some of this progress could be explained by seasonal factors (such as a good harvest). Yet, the fact that CCI improved much more in Tbilisi than in the countryside (see below) suggests that Georgian consumers, about 45% of whom face Debt Service Ratios above 30%, are genuinely encouraged by the lari holding ground against USD and other currencies. Whereas in all previous years the harvest – the money it brings in and the wine! –  tended to temporarily increase people’s willingness to make major purchases, last month’s improvement in consumer confidence was generated by a sense of greater macroeconomic stability and hence appears to be less transient in nature.


CCI increased in both Tbilisi and the rest of Georgia (RoG), but more so in the capital. Consumer confidence significantly improved in Tbilisi (up by 6.8 points, driven by a dramatic improvement in expectations), reaching -31.9 points. In the RoG, the Index increased by 3 points, reaching -38.4 points.

  Tbilisi Rest of Georgia (RoG)
Overall CCI -31.9 (down by 6.8 points) -38.4 (up by 3 points)
Present Situation Index -42.2 (up by 4.7 points) -51.3 (up by 1.1 points)
Expectations Index -21.6 (up by 8.9 points) -25.5 (up by 4.9 points)
Gap 20.7 25.7


Tbilisi: consumers expect greater economic stability, as reflected in their responses to questions about people’s personal financial position, Georgia’s general economic situation, willingness to save and prices.

Rest of Georgia (RoG): major improvements were observed in perceptions of general and personal financial situations, prices and employment.

Interestingly, the younger respondents (35 years old and below) do not report almost any increase in consumer confidence, as compared to a healthy 7-point improvement for older respondents. This outcome was primarily driven by answers regarding major purchases. The number of younger respondents saying that it was a bad time to make major purchases increased m/m to 49% from 39%.

  Young (below 35) Older (above 35)
Overall CCI -34.5 (up by 0.3 points) -37.7 (up by 7.0 points)
Present Situation Index -47.0 (down by 2 points) -49.2 (up by 5.0 points)
Expectations Index -21.9 (up by 2.6points) -26.1 (up by 8.9 points)