Thursday, February 6 2014 11:56
Consumer confidence index plummeting in Armenia with consumers' outlook becoming increasingly pessimistic
ArmInfo. Respondents assessed the Consumer Confidence Index 3.4 points lower for 2013, the Central Bank of Armenia told ArmInfo. Respondents assessed the CCI for Q4 2013 at 40.9 points versus 41.9 points in Q3, 44.3 points in Q4 of 2012 and 44.2 points in Q4 2011. For comparison, respondents gave better assessment of CCI only in Q2 and Q3 of 2011 and Q1 and Q2 of 2012. Since then, the consumers' outlook has been increasingly pessimistic.
Assessment of the Current Conditions Index fell from 39.4 to 34.5 points amid unchanged quarterly dynamics and a two-year decline by 5.3 points. Another CCI subindex - Future Conditions Index fell from 49.3 to 47.2 points amid 2.1-points decline for Q 4 and a 1,4-points decline for 2 years. Households' appraisals of the current economic situation grew by 2.5 points for Q4 2013 to 19 points amid 16.1 points for Q3, 26.5 points for 2012 and 26.7 points for 2011.
Appraisals of major purchases for Q4 2013 fell from 54.3 to 53.2 points (growth from 50.2 points over the year). Revenue subindex appraisals made up 31.2 points versus 33 points in the previous quarter and 41.4 points in Q4 2012.
In the future conditions index, the employment subindex appraisals grew from 48.2 to 49.8 points versus 5.15 points for Q3 2013 and a two-year growth from 49 points.
The appraisals of other two subindices fell. Thus, appraisals of the possibility of major purchases in next quarter fell from 53.8 to 52.6 points in Q4 2013 versus 57.4 points for Q 4 2012 and 53,8 points for Q4 2011.
Appraisals of revenue subindex proved even more pessimistic falling from 42.7 to 39.4 points for Q4 2013 versus 42.2 points for Q4 2012 and 43,1 points for Q4 2011.
Staring Q1 2013 the economic activity index was renamed into business activity index. Alongside with that, the methodology of calculation of the three composite indices - business activity, business environment and consumer confidence - was changed as well. From now on, these indices will be published building on the averaged points of respondent appraisals and not in percentages as before 2013.
Business activity is calculated on the basis of manufacture scales appraisals for the current and future quarters, expectations of reserves and demand for production or services. Business environment is determined on the basis of economic situation appraisals for the current and future quarters. Consumer confidence is a diffusion index calculated on the basis of the averaged points given by respondents that answer 6 questions. The points range between 0 and 100, where zero means deterioration of expectations of all respondents and 100 means improvement, while 50 means stabile situation (half of the respondents expect improvement, while the other half expected deterioration). The Central Bank of Armenia determined the stable level at 45-55 points.
The Central Bank has been conducting the poll since 2005 to assess the current economic situation and expectations. The method of calculation is based on the US Conference Board and German IFO standards.
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