Consumer Confidence Index

Details: Created: 18 April 2021

The CCI deteriorated in March. We had hoped that the recovery of the Consumer Confidence Index, observed since December 2020, would bring the Index back to the levels observed last summer. Unfortunately, the trend reversed in March and the CCI decreased, from -35.5 in February to -39.0 in March. Both sub-indices (the Present Situation Index and the Expectations Index) also followed the same pattern (Chart 1).

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Details: Created: 17 March 2021

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Amid softened restrictions consumer confidence is increasing. The Index is up by 2.8 index points and the pattern is similar for both sub-indices: the Present Situation Index went up by 3.9 (from -43.1 to -39.2) and the Expectations Index is up by 1.7 (from -33.4 to -31.7) as can be seen on Chart 1.

What happened? In February, the Government of Georgia lifted restrictions on trading activities and public transport. Schools and kindergartens were reopened. Georgia also eased entry restrictions for Armenian, Azerbaijani, Belarusian, Kazakh, Russian, and Ukrainian travelers, triggering positive expectations about a possible revival of the tourism industry in the near future.

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Details: Created: 17 February 2021

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Confidence has rebounded in January, but slightly. The improvement has however put a halt to the negative trend observed during the last two months. The index is up by 1.4 index points and the pattern is similar for both sub-indices: the Present Situation Index went up by 0.6 (from -43.7 to -43.1) and the Expectations Index by 2.3 (from -35.7 to -33.4) as can be seen from Chart 1.

What happened? Throughout December and January, the Government of Georgia maintained restrictions on trading activities and public transport to reduce the number of COVID-19 cases. It paid off and the daily cases plummeted from 5,000 to under 1,000. This surely helped the CCI in January in spite of the unavoidable social costs.

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CCI Methodology

The ISET Consumer Confidence Survey follows the standard EU methodology (see Useful Links): we randomly sample 300-350 individuals on a monthly basis and question them about the past, current and future financial situation of their families and the country as a whole.Consumer confidence is the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. How confident people feel about stability of their incomes determines their spending activity and therefore serves as one of the key indicators for the overall shape of the economy. In essence, if consumer confidence is higher, consumers are making more purchases, boosting the economic expansion. On the other hand, if confidence is lower, consumers tend to save more than they spend, prompting the contraction of the economy. A month-to-month diminishing trend in consumer confidence suggests that in the current state of the economy most consumers have a negative outlook on their ability to find and retain good jobs. Read more