Economic Barometer – Consumer Climate Index (CCI) – July 2014


Consumer sentiment has declined sharply relative to June, with the relevant index falling significantly for the first time this year. Nevertheless, it has steadfastly remained above 60 points throughout the entire year. The deterioration in consumer sentiment is evident in the five sub-indices that make up the index. Indicative of the decrease in optimism among citizens, not only for the future of the economy but also their personal financial situation, is the striking decline in expectations regarding unemployment.

The Consumer Climate Index – CCI (66.8) fell significantly (-4.2 points) relative to June. Nevertheless, it remained for the seventh straight month (1/2014-7/2014) above the 60-point mark. The Current Economic Conditions Index – CECI (46.1) registered a drop of 4 points, relative to June, while the Consumer Expectations Index – CEI (80.6) lost 4.4 points in just one month.

Propensity to buy (62, -5.2 points relative to the previous month) shows the greatest change compared to the other four sub-indices, all of which make up the Consumer Confidence Index. Assessments of personal financial situation (30.1) registered a drop (-2.8 points relative to June) for the first time after five months of continuous increase (2/2014-6/2014). Despite the decline in the current month, the relevant sub-index remains for the third consecutive month above 30 points. It is worth noting that nearly 3 out of 4 citizens (73%) believe that their personal financial situation has deteriorated in the past 12 months. Expectations of personal financial situation (61, -3.1 points relative to June) fell for the second straight month. The decline of the past two months (6/2014-7/2014) followed a long period of constant increase (11/2013-6/2014).

Only 1 in 10 (10%) citizens expect an improvement in their personal financial situation in the coming twelve months. Short-term expectations for the economy (74.6) fell by 2.9 points in one month. At the same time, long-term expectations (106.3) plummeted 7.2 points relative to June. It is interesting to note that 48% of respondents express pessimism about the future of the economy over the next 12 months, while this figure falls to 32% when the timeframe is expanded to five years.

Citizens’ expectations for unemployment (66.2) showed a marked decline (-9.8 points) relative to June, when they had reached the highest levels of the five-year period 2009-2014. The relevant index had risen rapidly during the previous three months (4/2014-6/2014), registering total gains of 26 points. The percentage of those expecting unemployment to fall in the coming 12 months dropped to 17%, from 22% in June. Expectations for saving and inflation showed little change. Just 1 in 10 (10%, +2% relative to the previous month) anticipate a decrease in prices in the coming 12 months, while the percentage of those considering it likely they will be able to save some amount of money in the year ahead stood at 6% (no change compared to June).