According to the data provided by Info Sapiens “Consumer confidence of Ukrainians”, conducted by Info Sapiens and financially supported by Dragon Capital, the Consumer Confidence Index (CCI) equals 65.1 in June, which is 11.2 points lower than in May. The following Indicator`s components have changed the most: Indices of Expected Changes in Personal Financial Standing and Expectations of the Country’s Economic Development.
In June 2020 the Consumer Confidence Index (CCI) equaled 65.1, that is 11.2 points lower than the indicator in May.
Index of the Current Situation (ICS) is stable and equals 54.8. The components of this index have changed as follows:
- – Index of Current Personal Financial Standing (х1) equals 45.8, which is 8.5 points lower than the indicator in May;
- – Index of Propensity to Consume (х5) increased by 8.7 p. and reached the indicator of 63.8.
In June, Index of Economic Expectations (ІЕE) decreased by 18.8 points to the level of 71.9. The components of this index have changed as follows:
- – Index of Expected Changes in Personal Financial Standing (х2) decreased by 18.3 points comparing to the previous month and equals 74.2;
- – Index of Expectations of the Country’s Economic Development Over the Next Year (х3) decreased by 17.7 points and equals 55.9;
- – Index of Expectations of the Country’s Economic Development over the Next 5 Years (х4) decreased to the level of 85.7, which is 20.3 points lower than in May.
In June, the indicator of Index of Expectations of Changes in Unemployment remains stable on the level of 153.2, which is 1.4 p. higher than previous month. Index of Inflationary Expectations increased to the level of 183.0, which is 17.6 points higher than last month. Expectations of Ukrainians regarding the hryvna’s exchange rate in the coming three months have worsened: Index of Devaluation Expectations increased by 6.2 points and reached the level of 142.7.
«In June 2020, compared to pre-quarantine March 2020, the consumer confidence index lost 8 points. Index of Current Personal Financial Standing fell the most (by 14 p.), The Propensity to Consume decreased by 11 p. Thus, during the quarantine, consumers felt their financial situation worsened and became more cautious about large purchases. At the same time, the Index of Expected Changes in Personal Financial Standing in June remained at the level of March 2020: consumers hope that income will return to normal due to the opening of the economy after quarantine.» - Info Sapiens analysts comment.
How the indices are calculated
The survey «Consumer confidence in Ukraine» was conducted by GfK Ukraine since June 2000. From 2019 this project is provided by Info Sapiens. From January 2009 consumer confidence survey is conducted on a monthly basis.
In Ukraine. the Consumer Confidence Index is determined through a random survey of domestic households. The poll involves 1.000 individuals aged 16+. (Up to April 2014 the poll involved 1.000 respondents aged 15-59). A representative sample is selected by gender and age, also by type and size of settlement. In April 2014 Autonomous Republic of Crimea was excluded from the sample of consumer confidence research in Ukraine. The margin of error is 3.2%. In April and May 2020, the survey was conducted via CATI method with calls on mobile phones. Dates of the interviews: 10-26 of June.
To define the CCI, respondents are asked these questions:
- 1. How has the financial standing of your family changed over the last six months?
- 2. How do you think your family’s financial standing will change in the next six months?
- 3. Looking at economic conditions in the country as a whole, do you think the next 12 months will be good or bad?
- 4. Looking at the next five years, will they be good ones or bad ones for the country’s economy?
- 5. In terms of large purchases for your home, do you think now is generally a good time or a bad time to make such purchases?
Each of these questions is related to a corresponding index:
- • index of Current Personal Financial Standing (x1);
- • index of Expected Changes in Personal Financial Standing (x2);
- • index of Expected Economic Conditions in the Country Over the Next Year (x3);
- • index of Expected Economic Conditions in the Country Over the Next 5 Years (x4);
- • index of Propensity to Consume (x5).
Indices are constructed thus: the share of negative answers is deducted from the share of positive answers, and 100 is added to this difference in order to eliminate negative values. On the basis of these five indices, three aggregate indices are calculated:
- • consumer Confidence Index (CCI) as the arithmetic average of indices x1–x5;
- • index of the Current Situation (ICS) as the arithmetic average of indices x1 and x5;
- • index of Economic Expectations (IEE) as the arithmetic average of indices x2, x3, and x4.
Index values range from 0 to 200. The index equals 200 when all respondents positively assess the economic situation. It totals 100 when the shares of positive and negative assessments are equal. Indices of less than 100 indicate the prevalence of negative assessments. To determine the Index of Expected Changes in Unemployment (IECU), the Index of Inflationary Expectations (IIE) and the Index of Devaluation Expectations (IDE), the respondents are asked these three questions:
- 1. Do you think that within next 12 months the number of unemployed (people who do not have job and are looking for work) will increase, will remain roughly the same, or will decrease?
- 2. How do you think that prices for major consumer goods and services will change in the next 1–2 months?
- 3. How do you think the USD value will change towards the UAH value during the next 3 months?
The IECU, the IIE and the IDE are calculated thus: the share of answers that indicate a decrease of unemployment/inflation/devaluation is subtracted from the share of answers that indicate the growth of unemployment/inflation/devaluation, and 100 is added to the difference to eliminate negative values. The values of indices can vary from 0 to 200. The index totals 200 when all residents expect an increase in unemployment/inflation/devaluation.