Ukrainian appetites grow

After two summer months marking a second round in consumer moods getting from bad to worse, August 2009 showed a degree of optimism, reads a press release based on a joint project by GfK and the International Center for Advanced Studies of Consumer Moods in Ukraine. The researchers estimate that the consumer moods index (ISN) has added 6.0 points to the original value of 63.2. Interestingly, this worsening of moods was registered against the backdrop of Ukraine’s unstable national currency, with the exchange rate being on a downward curve. As a rule, the hryvnia’s devaluation has an adverse effect on consumer moods, reads the press release. Another noteworthy fact is that, compared to the previous period, when the consumer moods brightened somewhat (February-May 2009), today the ISN growth is mostly explained by more positive forecasts than economic expectations. Thus, the economic expectations index had added a mere 2.4 points to the existing value pf 69.4 toward the end of the summer, compared to 11.5 points added to the current status’s, totaling 54.1. In other words, the findings read that Ukraine’s better consumer moods are explained by people becoming finally aware of positive changes rather than by expecting such changes sometime in the future.

«Both current status assessment components showed an almost synchronous increase in August 2009, namely by 11.7 points to the value 44.2, and the large-scale shopping index added 11.3 to the value 63.9. Therefore, it is possible to discuss a revival of the buying capacity and consumer trends in Ukraine,» reads the press release. The indices of economic expectations were also up, albeit on a lower level. The only exception is long-term economic expectations that have dropped by 2.2 points, totaling 78.6. Despite this relatively big index, it is adjustment rather than the worsening of Ukraine’s long-term economic outlooks. Considering a tangible drop in the hryvnia’s exchange rate in August 2009, the researchers regard as moderate an increase of the inflation expectations index by only 2.4 points, totaling 189.7, as moderate: «It correlates with the lowering of prices for domestic goods in August. At the same time, the worsening of unemployment expectations — by 11.4 points, totaling 148.2 — is an alarming signal that calls into question the duration of positive changes in the Ukrainian consumer moods.»