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The 2020 October parliamentary elections are quickly approaching. This could mark a turning point in Georgian politics as the country has embarked on the path towards a more proportional electoral system. We have been discussing the positive trend in the Consumer Confidence Index since May, and this is certainly in line with international research suggesting that an increase in confidence always occurs several months before elections, independent from the real economic conditions.
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After reaching a historic low in April 2020 Georgian consumer confidence has been steadily reviving. Covid-19 has shaken the world as well as Georgian consumers. One of the evidence that it has been an extraordinary time for Georgian consumers is that in April expectations index dropped below the present situation index for the very first time (see Figure 1). Therefore, we can speculate that negative perceptions of the present may have inflated in April due to a deep fear of the future. Hence, when people realized their expectations were not being met, they started to adjust accordingly.
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The interviewed sample in early May, of around 350 Georgians (Table 1 below summarizes the demographic background of the sampled population), reveals that Georgian Consumer Confidence rose in May compared to the prior month, by 8.1 index points, from -48.3 in April to -40.2 in May. This follows rapid declines in the index in March and April. The increase in Consumer Confidence was driven by the expectations index, particularly consumers are positive about general economic situation and their ability to save, for the next twelve months. Therefore, not surprisingly, Expectations Index registered an increase by 17.2 index points, from -51.2 in April to -34 in May. While, the other index that measures how Georgians feel about the economy right now, the Present Situation Index, went down by 1.1 index points, from -45.3 in April to -46.5 in May. The latter negative change occurred, as consumers remain concerned about their financial prospects and general economic situation at present.
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