January 2022 | CCI: reversal in December’s trend
22 February 2022

The CCI has fallen again. After a slight rebound of the Consumer Confidence Index in November, the index further improved in December from -31 to -29.8. However, in January the index decreased by 2.5 index points and fell to -32.3. Both the Present Situation Index and the Expectations Index followed the same trend in December as well as in January, with the Present Situation Index decreasing by 1.9 index points and the Expectations Index by 3.2 points (Chart 1).

In December, the major contributor to the increase, even though the change itself was insignificant, was people’s perceptions of how the general economic situation in Georgia had changed over the past 12-month period. In spite of high inflation and a new wave of Omicron cases in the country, consumer sentiment in December had a slight improvement which can be explained by expectations regarding the end of pandemic and relatively stable national currency, among other reasons.

As for January, there were several contributors to the observed decrease. The highest decline was seen in how people feel about saving during the current period, followed by expectations about changes in prices and unemployment levels in the country and lastly, how they expect the general economic situation to change in the upcoming year. The result is hardly surprising, as we’ve seen a huge increase in the number of infected people in January, together with the annual inflation rate peaking at 13.9%.

Consumer sentiment has declined in Tbilisi and in the rest of Georgia as well. The worsened pandemic situation and lowered expectations regarding the future have negatively affected the whole country (Chart 2). However, the decline in expectations seems to be higher in the regions compared to Tbilisi, with a 4 index point decline in the regions compared to a 2.6 point decline in Tbilisi. Given that the poverty rate in the regions is higher than in the capital and the population there is more prone to shocks, the burden of the pandemic and its consequences is heavier in the regions of Georgia.

BAR CHARTS: Consumer Responses by Questions