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Just as the flu season was making its annual rounds in Georgia, the consumer confidence index also appears to have suffered from a bout of “winter blues”. In January 2016 the index has declined after a large monthly increase in December 2015. Although the index has dropped significantly compared to the previous month, the increasing trend that began in October 2015 has been sustained. Both components of the index – the present situation and the expectations - have declined, however the most evident worsening was observed in answers related to expected changes in the country’s economy.
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The December CCI comes as a welcome gift to Georgian policymakers, truly sending season’s greetings from Georgian consumers. Despite the expectation that the index would stabilize at a new, lower level, consumer confidence has shown the largest monthly increase in the history of the study. Both the present situation and expectations indices increased significantly. Improvement was observed in answers to nearly all questions, especially those evaluating the current and expected timing for major purchases, the expected economic situation, and the change in the financial situation of households.
In December, the Consumer Confidence index stood at -30.4 points (a 9.6 points increase from November). Evaluation of the present situation increased by 8.6 points, reaching the -42.3 points mark. Similarly, the expectations index increased by 10.7 points, reaching -18.3. After a disappointing year of decline and fluctuations, the expectations index is now back at nearly the same level as it was a year ago, in December 2014.
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The November CCI data has all but reversed the uptick of confidence observed in October. The Consumer Confidence Index, which began to decline about a year ago, now seems to be stabilizing at a new and lower level. The breakdown of the index between different gender and educational groups suggests that intensive media coverage of particular issues and the diversity of information sources with different biases can significantly influence consumer confidence (see ISET Economists blog: Confidence Matters!).
In November, the Consumer Confidence Index fell to -40 points (a 3.8 points decrease from October). Consumer expectations seem to be have been affected the most, declining 4.9 points to reach the -29.1 mark, while the present situation index remained at a low level with a 2.6 points decrease (reaching -50.9 points).
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