The FINANCIAL -- Georgian Consumer Confidence (CCI) continued to improve, albeit slightly, in December 2017. CCI added 0.5 index points over November 2017, and 8.7 index points y/y, that is compared to December 2016. Interestingly, people’s perceptions of the recent past and expectations diverged in December.
CCI’s Present Situation sub-index went down by 2.3 points m/m, from -23.2 to -25.5), whereas the Expectations sub-index went up by 3.4 index points (from -13.4 to -10). However, both sub-indices ended the year ahead of their last year’s levels. The Present Situation sub-index demonstrated a rather modest improvement of only 4.3 index points (from -29.8 to -25.5). The Expectations sub-index added a very healthy 13.2 index points (from -23.2 to -10), betraying a sense of cautious optimism on the part of Georgian consumers.
Tbilisi vs. Rest-Of-Georgia
In November 2017, we observed a sharp divergence of Consumer Confidence among the residents of Tbilisi and everybody else. A month later, in the December 2017, we see both groups moving in the same (slightly positive) direction. In monthly terms, CCI added 0.4 and 0.7 index points in Tbilisi and Rest-of-Georgia, respectively. Compared to last year (December 2016), CCI added 12.1 index points in Tbilisi and 6.3 points in Rest-of-Georgia.
December Is a Time to Spend, Not to Save!
Young vs. Old
As we can see in the above charts, people of all ages consider December to be the wrong time to save. Much fewer people provided a positive response to Question #10 in our survey: Is now the time to save? Clearly, in December, most Georgians are getting ready for New Year festivities and feasts, and are savoring the opportunity to go abroad on ski holidays.
Our data thus confirm what behavioral economists and psychologists have known for long: people attach much greater value to experiences that are close in time and often surrender to short-term temptations. This the key reason why our plans to save for the future, or make healthier lifestyle choices, often fail. In December of each year, the long-sighted self (the “planner” who cares about saving for the future) completely surrenders to the short-sighted “doer” inside us.