OREANDA-NEWS. The beginning of 2014 was marked with a sharp drop of consumer confidence of Ukrainians. The Consumer Confidence Index (CCI) is 72.5, which is 7.8 p. lower than in December 2013. This is the lowest level of the CCI since April 2011. The index of expected changes in personal financial standing and propensity to consume suffered the lowest drop. It is proved by the data on Ukrainians’ consumer confidence survey conducted by GfK Ukraine on monthly basis.
In January 2014, the Consumer Confidence Index (CCI) decreased by 7.8 p. to 72.5.

Index of Current Situation lost 7 points and reached 74.3.

The components of this index changed in the following way:

Index of Current Personal Financial Standing (х1) is 73.3, which is 4.4 p. lower than in December;
Propensity to Consume (х5) lost 9.7 p. at once and reached 75.2.
Economic Expectations of the Population deteriorated by 8.3 p. and reached 71.3. The components of this index changed in the following way:

Index of Expected Changes in Personal Financial Standing (х2) is 78.0, which is 9.5 p. lower than in December;
Index of Expected Economic Conditions in the Country Over the Next Year (х3) lost 7.6 p. to 65.9;
Index of Expected Economic Conditions in the Country Over the Next Five Years (х4) deteriorated by 7.8 p. to 70.1.
In January, the expectations of Ukrainians concerning the unemployment dynamics suffered considerable deterioration: the respective index is 137.4, which is 8.5 p. higher than in December. While the inflationary expectations somewhat improved: the respective index is 180.2, it is 1.5 p. lower than in December. However, Ukrainians became more pessimistic regarding hryvnia exchange rate in the next three months: index of devaluation expectations of Ukrainians gained 13.4 p. to 148.7.

The following key trends were observed in January:

The Consumer Confidence Index in Ukraine dropped the lowest since April 2011. The index of expected changes in personal financial standing and propensity to consume suffered the lowest drop of about 10 p.
At the same time, there was observed a significant rise of the indices of expected unemployment dynamics and devaluation expectations, the latter reached the highest level for the period of its observation since January 2012.
Strong dependence of dynamics of consumer confidence on age and the level of well-being was observe; the younger and wealthier the group of respondents, the lower was the deterioration of consumer confidence there in January.
Region wise the drop of CCI was the lowest in the Western and Northern regions of Ukraine.
‘The lingering political turmoil, that turned into violent confrontation in January and caused hryvnia devaluation, predictably concerned the consumers. Job loss threat and devaluation of savings will considerably limit domestic demand until the political conflict is settled,’ as GfK Ukraine analysts comment.