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Consumer confidence in Ukraine, July 2010: Government plans spoil consumer mood in Ukraine

Results of consumer confidence survey in Ukraine, a joint project between GfK Ukraine and the International Centre for Policy Studies.

Ukraine’s consumers greeted the second month of Summer 2010 with an 8.1pp plunge in the Consumer Confidence Index (CCI), which fell to 86.4. This is the second month that this downward trend in the consumer mood has been seen, after three quarters of steady improvement. The drop in the CCI in July 2010 was the result of worsening economic expectations, as the IEE plunged 12.6pp to a once-again pessimistic 90.1, after hovering between neutral and optimistic. Estimations of the current situation also declined, although the ICS slipped a mere 1.4pp to 80.9.

Negative evaluations of the prospects for Ukraine’s economy also affected consumers’ expectations regarding inflation and unemployment trends. The two indices grew almost the same, with the IIE rising 6.8pp to 182.4 and the IECU jumping 6.2pp to 113.1.

"The Government’s plans to institute a series of unpopular reforms, especially to raise rates for energy and increase the pensionable age have been received rather coldly by most Ukrainians,” says ICPS Social Economy Program Manager Maksym Boroda, "although the pressure to do so is the result of revived cooperation with the IMF. At the same time, a slowdown in the economic revival coupled with a heatwave that has been threatening this year’s grain harvest has caused Ukraine’s consumers to feel more pessimistic about economic prospects.”