According to a nationally representative sample of 307 Georgians interviewed in early November 2018, the Consumer Confidence Index (CCI) dropped by 4 index points, from -18 in October to -22 in November. A similar pattern was observed in both sub-indices: the Present Situation Index went down by 4.7 (from -22.6 to -27.3), and the Expectations Index went down by 3.2 index points (from -13.4 to -16.6) compared to October.
One might wonder whether the drop in consumer confidence in November is caused by the presidential elections, held in October. In one of the previous CCI articles we have already discussed the correlation between CCI and elections: “In a 2008 working paper, the Greek economists Gikas A. Hardouvelis and Dimitrios D. Thomakos explore the relationship between consumer confidence and elections, using data from 15 European countries from 1985-2007. One of their most striking findings is that consumer confidence peaks around the election date ”. However, the pattern of CCI for the recent months does not follow the one observed in the literature, though that does not necessarily mean that in this case CCI and elections are not correlated.
Table 1: Change in Consumer Confidence (in Index Points): November 2018
| How did the general economic situation change in Georgia? past 12 months | -14.3% |
| Expected level of unemployment in Georgia, next 12 months | -9.1% |
| General economic situation, next 12 months | -6.5% |
| How much did consumer prices rise? past 12 months | -5.9% |
| Your current ability to save | -3.9% |
| Do you expect prices to increase more rapidly? next 12 months | -3.8% |
| Is now the right time for people to save in Georgia? | -3.2% |
| Your financial situation, past 12 months | -2.3% |
| Do you expect to increase spending on major purchases compared to the past? next 12 months | -2.0% |
| Your ability to save, next 12 months | -0.2% |
| Is now the right time for people to make major purchases in Georgia? | 1.5% |
| How will your financial situation change? next 12 months | 2.1% |
Table 1 demonstrates which questions are responsible for the decline in Overall CCI for the month of November. The greatest decline is observed in questions concerning the general economic situation (past and future 12 months), expected unemployment and inflation (next12 months). Furthermore, the largest gap between October and November is translated into the question “How did the general economic situation change in Georgia? past 12 months”. Perhaps, this could again be correlated with the presidential elections.
Table 2: Change in Consumer Confidence, by groups (in Index Points): November 2018
| Tbilisi | -1.7% |
| Rest of Georgia | -6.1% |
| Male | -3.8% |
| Female | -4.3% |
| Young | -0.2% |
| Old | -7% |
| Higher Education | -2.7% |
| The Rest | -5.1% |
Table 2 demonstrates that all groups were affected negatively in November 2018. What is striking is that the largest negative change is observed in the “Old” (over 35) and “Rest of Georgia” groups. Consumer Confidence for the old dropped by 7 index points, from -22 (in October) to -29 (in November). The decrease in confidence for this group was once again driven by the lower scores in the present situation index, down by 9.1 index points. Correspondingly, the pessimism in Georgian consumers from the rest of Georgia is reflected in the downward average CCI performance by 6.1 index points, from -26 (in October) to -32.1 (in November).
Table 3: Change in Consumer Confidence (in Index Points), in Groups by Questions: November 2018
Tbilisi |
Rest of Georgia |
Male |
Female |
Young |
Old |
Highly Educated |
The Rest |
|
| How did the general economic situation change in Georgia? past 12 months | -13.0% |
-15.3% |
-15.8% |
-13.3% |
-6.4% |
-19.2% |
-14.8% |
-12.0% |
| How much did consumer prices rise? past 12 months | -11.4% |
2.9% |
-10.2% |
-2.2% |
-5.8% |
-6.3% |
-15.6% |
15.3% |
| Expected level of unemployment in Georgia, next 12 months | -6.7% |
-11.7% |
-11.7% |
-7.1% |
-7.7% |
-10.5% |
-11.5% |
-3.2% |
| Do you expect prices to increase more rapidly? next 12 months | -5.9% |
-1.3% |
0.2% |
-7.1% |
-8.2% |
-1.4% |
-2.7% |
-5.1% |
| Your current ability to save | -4.3% |
-2.1% |
-5.2% |
-2.8% |
-0.1% |
-7.3% |
-4.2% |
-1.4% |
| General economic situation, next 12 months | -3.1% |
-11.3% |
-9.1% |
-4.6% |
-2.1% |
-9.6% |
-2.6% |
-13.4% |
| Is now the right time for people to save in Georgia? | 2.0% |
-9.4% |
-2.5% |
-4.3% |
2.9% |
-8.0% |
4.8% |
-19.0% |
| Your ability to save, next 12 months | 2.7% |
-2.4% |
3.1% |
-3.3% |
-2.9% |
-0.6% |
1.2% |
-0.9% |
| Your financial situation, past 12 months | 3.5% |
-9.3% |
-2.7% |
-2.1% |
8.3% |
-9.1% |
0.1% |
-6.0% |
| Do you expect to increase spending on major purchases compared to the past? next 12 months | 4.4% |
-9.4% |
0.5% |
-4.2% |
2.2% |
-5.6% |
3.0% |
-10.2% |
| Is now the right time for people to make major purchases in Georgia? | 5.0% |
-0.6% |
0.1% |
2.1% |
8.9% |
-4.5% |
1.4% |
4.6% |
| How will your financial situation change? next 12 months | 5.9% |
-3.0% |
7.4% |
-2.4% |
8.3% |
-1.8% |
8.0% |
-9.3% |
Table 3 shows the changes that happened in the perceptions of each group of the population by each question for the month of November. All the groups showed negative patterns in the questions concerning expected unemployment, and the general economic situation, whether related to the past or the future. Note which groups were affected more negatively, question by question. The table below summarizes results by question of interest.
| How did the general economic situation change in Georgia? past 12 months | Old male highly educated Georgians from the Rest of Georgia |
| How much did consumer prices rise? past 12 months | Old male highly educated Georgians from Tbilisi |
| Expected level of unemployment in Georgia, next 12 months | Old male highly educated Georgians from the Rest of Georgia |
| General economic situation, next 12 months | Old male not highly educated Georgians from the Rest of Georgia |
In contrast to October, when young men contributed to the decline in CCI, in November, old men are to blame!
MONTHLY AND YEARLY CHANGES IN THE CCI VARIABLES
BAR CHARTS: CONSUMER RESPONSES BY QUESTIONS
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