Consumer Confidence in Ukraine, December 2016: index reached 57.1

Kyiv, 17 January 2017 – The consumer confidence of Ukrainians improved in December 2016: Consumer Confidence Index (CCI) equals 57.1, which is 9.7 points higher than the indicator in November. Almost all index components showed positive dynamics. Index of Economic Expectations and Index of Expected Changes in Personal Financial Standing has changed most of all. It is proved by the data of The Consumer Confidence of Ukrainians survey conducted monthly by GfK Ukraine

In December 2016, the Consumer Confidence Index (CCI) equaled 57.1 that is 9.7 points higher than the indicator in November.

Index of the Current Situation (ICS) increased by 6.7 points to the level of 53.4. The components of this index have changed as follows:
  • Index of Current Personal Financial Standing (х1) equaled 43.4, which is 8.6 points higher than in November;
  • Index of Propensity to Consume (х5) increased by 4.7 points and reached the indicator of 63.5.
Index of Economic Expectations (ІЕE) increased by 11.7 points, and reached 59.6 in December. The components of this index have changed as follows:
  • Index of Expected Changes in Personal Financial Standing (х2) increased by 14 points and equals 57.3;
  • Index of Expected Economic Conditions in the Country Over the Next Year (х3) increased by 5.8 points and reached 46.5;
  • Index of Expected Economic Conditions in the Country Over the Next 5 Years (х4) increased by 15.3 points and reached the level of 75.1.
In December, the expectations of Ukrainians regarding possibility of unemployment declined: Index of Expectations of Changes in Unemployment reached the level of 145.2, which is 1.3 points higher than the respective indicator in November. Meanwhile, Index of Inflationary Expectations improved and reached 186.3 in December, which is 3.9 points lower than in November. The expectations of Ukrainians regarding the hryvna's exchange rate in the coming three months are optimistic in December: Index of Devaluation Expectations decreased by 6.1 points and reached the level of 158.5.

«Consumer optimism usually improves in December. Comparing to November, the Index of Economic Expectations in the next 5 years improved most of all in December 2016. That might reflect restoring trust in government. This index reached its maximum indicator over the last 2 years», ─ GfK Ukraine analysts comment.


Consumer Confidence in Ukraine, December

Dynamics of the Consumer Confidence Index in Ukraine (16+ target group)
Month, yearConsumer Confidence Index (CCI)Index of the Current Situation (ICS)Index of Economic Expec-tations (IEE)Index of Expec-tations of Changes in Unem-ployment (IECU)Index of Inflationary Expec-tations (IIE)Index of Devaluation Expec-tations (IDE)
12'16 57.1 53.4 59.6 145.2 186.3 158.5
11'16 47.4 46.8 47.9 143.9 190.2 164.6
12'15 53.1 48.4 56.3 144.1 187.2 150.3


How the indices are calculated

The consumer confidence survey is conducted in Ukraine since June 2000. 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%. The survey is carried out on 1-15th every month.

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.


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