ISET

Employment and income in the regions of Georgia strongly depend on agricultural performance during the harvest season, which starts from August and finishes at the end of October. The summer of 2014 was one of the driest in recent years, which has already negatively affected the harvest of one to two year cultures like wheat, sunflower, maize, etc.. Consequently, the impact of the drought was reflected in the Consumer Confidence Index in August. Both its components, the present situation and expectations indices, declined in the regions of Georgia. Moreover, a fall in the Expectations Index was observed for the first time after a four-month consecutive increase. In contrast, Tbilisi shows the opposite pattern with increased consumer confidence for both the present situation and expectations indices. This can be explained by the active business season due to commence in September after the summer vacations. More precisely, the overall CCI has decreased to -13.7 points (down by 1.9 points from July). The Present Situation Index has decreased by 2.4 points, reaching -17.8 points – the lowest point since August 2012. The Expectations Index has also fallen by 1.3 points reaching -8.7. In terms of annual comparison, the overall CCI remained nearly the same (up by 0.04 points). Interestingly, the overall CCI in Tbilisi is 1.1 points lower than in same period of last year, while it has increased by 1 point in the regions. Furthermore, the Present Situation Index has decreased by 3.5 points, which was mainly driven by the decrease of the index in the regions of Georgia. As for the Expectations Index, it increased by 3.6 points compared to August 2013. A few things to note: • In year-on-year terms, a comparison of the Present Situation Index for the regions of Georgia, shows a significant 4.2 points decrease.

Tourism is one of the main sources of income for rural population of Georgia, which benefited a lot thanks to summer weather conditions. Unlike to prolonged rainy season in the same period of last year, tourists enjoy sunshine in July 2014. Accordantly, the Consumer Confidence Index increased for the regions of Georgia (ROG) while it declined for Tbilisi citizens, who mostly spend money on holidays. At the same time CCI and both its components improved for young, while it declined for old population, in addition to good holiday season that might be the effect of planned KaZantip Anaklia event. Overall CCI experienced a slight decrease compared to the previous month. The Expectations Index remained almost unchanged (down by 0.1 points), as opposite changes in the regions and Tbilisi balanced each other. Present Situation Index declined (down by 2.9 points), mostly driven by sharp drop in Tbilisi. Thus, the overall Consumer Confidence Index decreased by 1.5 points and reached -11.4 points. In year-on-year terms, the change in the overall CCI is again negative (down by -1.7 points), meaning that in the same period of last year consumer confidence was a bit higher than it is now. Unlike to overall CCI, annual change in the Expectations Index is slight positive number (0.2 points). The Present Situation Index worsened by 3.5 points. A few things to note: •

In June 2014, the CCI experienced a slight increase compared to the previous month. Both its components, the expectations and the present situation indices, improved. The improvement was much more significant in the expectations index, which increased by 2.8 points; while the present situation index improved by only 1.8 points. The overall Consumer Confidence Index increased by 2.3 points to reach -9.8 points. The increase in the expectations index might be explained by the EU-Georgia Association Agreement, which is perceived as leading towards a good/European life for Georgia in the future. Another factor that positively contributed is the local elections. Our past experience with CCI data shows that consumers’ expectations hike just before elections (as it did in both November 2012 and 2013). In year-on-year terms, the overall CCI is again negative (-1.0), meaning that in the same period last year consumer confidence was a bit higher than it is now. But interestingly enough, the change in the expectations index became positive for the first time in five months. The present situation index significantly worsened (down by 3.1 points), which outweighed the positive change in expectations. A few things to note: •

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