Editor’s Note: Economic Snapshot is a new Kyiv Post feature on the economic situation in Ukraine.Consumer confidence in Ukraine crept up in October, partly recovering from a sudden September drop that followed nine months of steady growth, according to a monthly survey conducted by market research firm GfK Ukraine.
The survey recorded a rise in consumer confidence of 3.9 points on a 100-point index scale to 78.6.
The biggest gains came from the assessment of the current situation, as people saw their personal financial standing improve and acted accordingly.
Indeed, with Christmas around the corner, consumer confidence was mainly driven by the propensity to consume, which added 8.9 points to reach 82.7, GfK said in a report.
Global economic turmoil, however, continued to weigh on spirits. Both expected changes in personal financial standing and the economic conditions in the country remained virtually flat.
The greatest levels of pessimism were expressed by people with lower than average incomes and citizens of western Ukraine.
Unemployment and inflation expectations were also affected by the macroeconomic worries, with both indexes rising in comparison to September.
With many economists now projecting a second wave of global economic recession, this is hardly surprising. Interestingly, though, five-year prospects were viewed in a more positive light.
Persons in the higher income brackets were the main drivers of improved sentiment regarding the current situation. This mirrors global changes, with Germany and the U.S. both recently seeing consumer confidence gaining strength, albeit moderately.
Double digit growth of retail sales, which rose over 15 percent year-on-year in January-September, and stronger-than-expected gross domestic product growth, suggest Ukraine may face a reasonably upbeat end of the year.
Indeed, the arrival of the Christmas season is typically marked with higher sales as people move spending from their January and February incomes.
GfK analysts warned that road ahead is not rosy.
Commenting on the survey results, GfK said:“Over the half year Consumer Confidence Index ranged between 70-80 with a tendency for indices of the current situation and economic expectations to become closer. This might be the evidence of higher propensity to consume, “live the present day.”
“However, higher depression within consumer confidence and lower availability of loans do not allow us to expect recovery of pre-crisis purchase volumes of durables,” GfK added.
Conducted since June 2000, GfK’s consumer confidence survey is produced by polling 1,000 individuals aged 15–59, an age group that represents 61.3 percent of Ukraine’s population and the country’s most active consumers.
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Kyiv Post staff writer Jakub Parusinski can be reached at [email protected].
