A slight increase in CCI: consumer confidence increased from -30.4 in June to -25.5 in July. This 4.5 index point increase was mostly driven by a jump in expectations – the Present Situation Index increased by 1.1 index points and the Expectations Index by a notable 8.8 points. Consequently, the overall index reached its highest point since the start of the pandemic.

Key drivers behind the positive shift in expectations, relative to the same sentiments in June, are consumers’ beliefs regarding the general economic situation and the expected level of inflation in the country. Furthermore, expectations that the general economic situation will change in the upcoming 12 months have increased by 23 index points. The reason behind such high hopes might relate to the increase in economic activity from tourism and exports in July. Revenues from tourism showed a rise of 130% in July compared to the same month last year, and a 20% increase compared to the 2019 pre-pandemic figure. At the same time, exports reached a monthly record-high in July. While expectations about future prices increased by 19 index points. Inflation still remains a major challenge to the Georgian economy, and one possible explanation for increasing sentiment might be the declining trend in the rate of inflation in June and July, which itself may have convinced people that the trend will continue. Appreciation of the Georgian lari may also have played a role in affecting sentiment.

In terms of current perceptions, there is a notable change in how people evaluate the ongoing economic situation. This perception increased by 10 index points. Moreover, people are currently more eager to make major household purchases (a 16-point increase). Once again, increased tourism, remittances, and trade activity might be fueling this change. However, people’s willingness to save has decreased by 16 index points, thereby offsetting the positive trends seen in other factors under the current situation. With high current spending, high prices, and the vacation season, it is also likely that people are simply not in a position to make savings.

The CCI has increased both for Tbilisians and for people from the regions. In each case, the major driver is a rise in expectations, and the overall trends mentioned above are representative across the country. However, increased expectations towards the change in the general economic situation is higher in the regions, while for Tbilisians the capacity to save decreased remarkably. As detailed in the last report, for the regions this might be related to greater agricultural production. Furthermore, rising exports and increased touristic activity might also be contributors. As for Tbilisians, a more significant decrease in the ability to save may have been instigated by the higher costs of living associated with the capital.