September 2022 | CCI: A minor fall in confidence
23 October 2022

CCI stumbled in September. After observing a positive trend in the CCI since May, a minor fall can be seen in September – from -23.9 in August to -24.1 in September (0.2 index points). The CCI’s two sub-indices moved in different directions; while the Present Situation Index declined by 0.8 points, the Expectations Index showed an increase of 0.3 index points.

In terms of the CCI’s indicators, most showed slight variations with a negative or positive trend, except for the more noteworthy shifts discussed below, though overall it concluded with a negative trend. Perhaps most notably, people’s expectations regarding changes in prices showed the highest decrease (9 index points). This particular indicator maintained a significant upward trend during the summer, linked to falling real monthly inflation rates, appreciation of the Georgian currency, and a slight reduction in fuel prices. However, inflation showed a modest increase in September and the GEL started depreciating by the end of August, which might have contributed to this decline in expectations. Furthermore, people’s expectations about change in the general economic situation fell by 6 index points. This indicator also saw a major upward shift in July, and what we currently observe is likely an adjustment after the peak of international arrivals and exports. On a positive side, there was a major rise in people’s expectations regarding employment levels, and the indicator increased by 20 index points, which caused overall trends within the Expectations Index to tilt towards the positive. Such a boost was rather unexpected, yet it could still be linked to an overall increase of job offerings on the labor market (according to PMC research, the total number of job offerings from March to August 2022 increased by 37% compared to the corresponding period last year). We can also see a marginal decrease in unemployment levels – from 19.4 in Q1 2022 to 18.1 in Q2 2022.

There is no change in the CCI for Tbilisians, although the index decreased by 0.3 points for people from the regions of Georgia. Negative sentiment about future price changes predominantly comes from residents of the regions (17% decrease), whereas the indicator for Tbilisians hardly changed (a fall of 1%). This has always been the case in the CCI, as people from the regions are more vulnerable to price changes. Compared to the sentiment in August, both Tbilisians and individuals from the rest of the country share pessimism about the general upcoming economic situation. As for anticipated employment levels, expectations increased significantly for both groups, even more so for people from the regions (a rise of 16% for Tbilisians and 25% for the rest of Georgia).

BAR CHARTS: Consumer Responses by Questions