June 2016 - CCI growth is sustained for five consecutive months.
Similar to the situation in May, the increase in the overall index was modest. There was a sustained increase in the present situation index, as households see some stability in their current financial situation. There was almost no improvement in the expectations index . Expectations may get a further boost later on in the year, particularly during the pre-election period.
A number of factors could have affected consumer confidence in June. These include fluctuations of the GEL/USD exchange rate in the second half of the month; inflation rate (currently very low); the increase in the number of tourists entering Georgia; and reports of a good harvest of cereal crops.
In June, the overall consumer confidence index increased to -27 points (gaining 1.2 points from May 2016). Both the present situation and expectations indices increased modestly. The present situation index gained 1.8 points, reaching -37.7-point mark, while the expectations index reached the -16.3-point mark, a gain of only 0.7 points.
The changes were mainly driven by the relative stability of household finances; a reduction of negative perceptions of the economic situation; and improving perceptions regarding inflation.
Specifically, (i) more people stated that the financial situations of their households had stayed the same, (ii) fewer people said that the general economic situation in the country had got worse, and (iii) fewer people stated that prices had risen a lot over the last 12 months.
To summarize the general CCI findings:
- The share of respondents who said that the financial situation of their household had stayed the same over the last 12 months increased from 46% in May to 54% in June;
- The share of respondents who said that general economic situation in the country had got worse decreased from 56% to 49% month over month (MoM);
- The share of respondents who said that prices had risen a lot over the last 12 months decreased from 63% to 58% MoM.
The impact of the above mentioned economic effects on different strata was the following:
| Sub-Group | Present Situatuation | Expectations | Overal CCI |
| AGE | |||
| 35 and below | -20.5 (up by 5 points) | -12.3 (down by 3 points) | -20.9 (up by 1 point) |
| Over 35 | -44.2 (down by 1 point) | -19.4 (up by 2 points) | -31.8 (up by 0.3 points) |
| GENDER | |||
| Male | -37.9 (up by 0.5 points) | -17.6 (down by 3 points) | -27.8 (down by 1 point) |
| Female | -37.6 (up by 3 points) | -15 (up by 3 points) | -26.3 (up by 3 points) |
| EDUCATION | |||
| Higher education | -31.9 (down by 1 point) | -15.6 (down by 3 points) | -23.8 (down by 2 points) |
| The rest | -41.2 (up by 7 points) | -16.6 (up by 5 points) | -28.9 (up by 6 points) |
Here are some interesting insights from this data:
More respondents without higher education expected the financial situations of their households to improve. Fewer people in this sub-group saw a large increase in price levels and more thought that it is a good time to make major purchases. Similarly, more respondents aged 35 or younger thought that it was a good time to make major purchases.
Specifically:
- The share of respondents without higher education who expected the financial situation of their household to improve increased from 30% to 40% month over month.
- The share of respondents without higher education who said that prices had risen a lot over the past 12 months decreased from 72% to 57% in June.
- The share of respondents without higher education saying that it was a good time to make major purchases increased from 20% to 30% MoM.
- The share of respondents aged 35 or younger saying that prices had risen a lot over the past 12 months decreased from 60% to 42% month over month.
- The share of respondents aged 35 or younger saying that it was a good time to make major purchases increased from 35% to 46% in June.
REGIONAL PECULIARITIES
In June, the overall consumer confidence index modestly increased in both Tbilisi and the rest of Georgia (RoG). The overall index gained 1 point in Tbilisi, reaching -25.8 points. Improvements were more pronounced in the RoG where the index gained 2 points, reaching - 27.7 points.
| Tbilisi | Rest of Georgia (RoG) | |
| Overall CCI | -25.8 (up by 1 point) | -27.7 (up by 2 poits) |
| Present Situation Index | -32.9 (up by 1 point) | -40.4 (up by 3 points) |
| Expectations Index | -18.7 (up by 1 point) | -14.9 (no change) |
| Expectations-Present Gap | 14 points | 26 points |
In Tbilisi, the improvement of the index was related to both the assessment of present situation and the expectations. The most notable changes related to questions related to the assessment of the present and expected financial situations of households, and to the change in the general economic situation and prices over the last 12 months.
To summarize the changes in consumer confidence in Tbilisi:
- The share of respondents from Tbilisi saying that the financial situation of their household had stayed the same over the past 12 months increased from 50% to 59% in June.
- The share of respondents from Tbilisi expecting the financial situation of their household to get a little better over the next 12 months increased from 32% to 40% MoM.
- The share of respondents saying that the general economic situation had gotten worse over the past 12 months decreased from 51% to 41% in June.
- The share of respondents from Tbilisi saying that prices had risen a lot over the last 12 months decreased from 61% to 54% month over month.
As for the rest of Georgia (RoG), the change in the index was caused by a more positive assessment of the financial situations of households as well as perceptions of the timing of major purchases.
To summarize the changes in consumer confidence in the RoG:
- The share of respondents saying that the financial situations of their households had stayed the same increased from 44% to 51% month over month.
- The share of respondents saying that it was a very good moment to make major purchases increased from 26% to 32% in June.
