August 2022 | CCI: The upward trend continues
23 September 2022

CCI continues to grow. By the end of the summer, a further, rather moderate increase of the CCI can be observed – from -25.5 in July to -23.9 in August (1.6 index points). There was an increase in both sub-indices – the Expectations Index and the Present Situation Index – of 0.4 and 2.9 points, respectively. After a rise in expectations in July, a minor shift appears fairly rational, at the same time current sentiments seem to be catching up.

The most significant driver of the observed increase is consumers’ perception related to changes in their personal financial situation over the last 12 months, which showed growth of 11 index points compared to July. Overall, the indicator stands at its highest since the start of the pandemic, almost reaching its pre-pandemic level. The fuel behind the increase in August could be the continuation of increased tourism revenues into Georgia; more so in August than July, and a 163% rise compared to the previous year and even a 27% increase compared to the 2019 pre-pandemic level. A strong inflow of remittances, starting from May 2022, could also have played a role here. Furthermore, sentiment towards current savings increased by 6 index points. This be seen as a slight recovery after the decline of the indicator during June and July, when spending took preference over savings. Last but not least, there was an expectation for prices to decrease (5 points). This sentiment might be driven by the decreasing trend of inflation that continued into August, paired with appreciation of the Georgian lari. Additionally, fuel prices slightly decreased during the month, and as the Head of the Union of Oil Products Importers declared in August, the trend is expected to continue into September as well. Therefore, people likely became more hopeful about the fall in future prices.

For Tbilisians, the CCI increased by 2.1 index points and by 1 point for people from the regions. Expectations remain high in both groups, with only a marginal drop observed for residents in the regions. Specifically, expectations about the general economic situation have decreased compared to the significant rise seen in July, which possibly relates to the end of the vacation season. As for current perceptions, the improvements mentioned above can be seen throughout Georgia.

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