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: •

The overall CCI increased for all respondents, irrespective of their education level. However, the magnitude of the change was different for those with and without higher education. The expectations index for respondents with higher education increased by only 0.3 points, while the same index for people without higher education gained 2.5 points. There was no significant difference in the present situation index according to education levels. The overall CCI for respondents without higher education is greater (-6.5) than compared to the rest of the population (-12.8 points). This means that people with higher education are more optimistic and perceive both the current as well as the future social and economic situation more positively. • From the gender perspective quite a big difference can be seen in the CCI. The improvement in the expectations index was sharper for males, increasing by 4.4 points; while it increased by only 1.5 points for females. The situation concerning the present situation index is reversed, with male perceptions of the current situation standing at the same level as the previous month, while increasing by 3.3 points for females. All of these changes made the overall CCI for females a little bit higher as compared to that of males (-9.5 and -10.1, respectively). Women are more optimistic. For a discussion of this, see the ISET Economist article “On Women and Money” (http://www.iset.ge/blog/?p=3160). • The CCI for old and young respondents is moving in opposite directions. Compared to May 2014, the overall CCI for young respondents dropped by 4.7 points, while it increased by 6.5 points for older society. Despite such a big drop in confidence for the young and an increase of that of the old, the overall CCI for young people remains above that of the old (8.2 compared to 11.0 points respectively). Regional Peculiarities In June 2014, the CCI increased all over Georgia, but the increase was much more pronounced in Tbilisi (up by 4.8 points) compared to the rest of Georgia (up by 0.9 points). There were no significant regional differences in the expectations index, which improved by 3.9 points in Tbilisi and 2.1 points outside the capital. The difference in the overall CCI between the capital and the rest of Georgia was thus mainly driven by a very sharp increase in the present situation index for Tbilisi citizens (up by 5.8 points), while the same index remained almost the same as the previous month for the rest of Georgia (down by 0.3 points). If we look at the responses to certain questions separately some interesting observations can be made. It rarely happens that people outside the capital have better perceptions regarding the current and expected economic situation. A total of 55 percent of respondents from the regions expect an improvement in the general economic situation, while only 47 percent of Tbilisi respondents think in the same way. The biggest difference between the capital and the rest of Georgia appears in the responses to question 8, concerning people’s readiness to make major purchases. In Tbilisi, 65 percent evaluated the current time as the right moment to make major purchases, while in the regions only 43 percent thought in the same way. Lastly, the CCI has been very volatile in Tbilisi since March 2014. The rest of Georgia has been more stable, the June data reflecting a third consecutive month of moderate improvement. It is important to understand the roots of such shocks in Tbilisi (the economic center of Georgia) as these that will largely affect the economic development of the country.