How Did Uzbek Consumers Feel Last Year
In 2024, consumer confidence in Uzbekistan declined, yet remained in positive territory. This conclusion was reached by the analysts at Kursiv Uzbekistan after reviewing data from 12 waves of public opinion surveys conducted by Freedom Finance Global.
What is the Consumer Confidence Index and how is it calculated
The Consumer Confidence Index (CCI) is a leading indicator that signals the impending revival or slowdown of consumer activity.
This indicator is calculated based on monthly representative surveys of the population. Citizens are asked to answer five questions:
- How do you feel about your current financial situation compared to a year ago? (Index of changes in personal financial situation)
- How do you expect your financial situation to change in the next year—will it be better, worse, or remain the same? (Index of expected changes in personal financial situation)
- How do you perceive the economic situation in Uzbekistan compared to a year ago? (Index of changes in the economic situation in Uzbekistan)
- How do you expect the economic situation in Uzbekistan to change over the next 12 months—will it be better, worse, or remain unchanged? (Index of expected short-term changes in Uzbekistan’s economic situation)
- Do you think that now is a favourable or unfavourable time to make large purchases? (Index of favourable conditions for large purchases)
Respondents can provide answers that are decidedly positive, mostly positive, decidedly negative, mostly negative, or neutral.
For each question, a sub-index is calculated. Answers that are decidedly positive are assigned a value of “1,” mostly positive responses are assigned “0.5.” Similarly, decidedly negative answers receive a value of “-1,” and mostly negative answers are assigned “-0.5.” Neutral answers and “I don’t know” responses are scored as “0.”
The sub-index values are then summed and divided by the number of responses. To avoid negative values, “100” is added to the resulting number.
The final Consumer Confidence Index is the arithmetic average of all five sub-indices. Values above 100 indicate a predominance of positive evaluations, while values below 100 suggest a more pessimistic consumer outlook.
Winter
During winter and the first month of spring, consumer sentiment was largely influenced by seasonal factors. Amid the sharp drop in temperatures in February, the government introduced restrictions on electricity consumption and reduced gas supplies to gas filling stations, leading to queues at petrol stations.
Additionally, from 1 February, excise tax rates on petroleum products and goods sold to the final consumer increased, resulting in a 23% average retail price hike for AI-80 petrol and diesel. AI-80 was also subject to supply disruptions at petrol stations that month.
As a result of these issues, consumer confidence weakened by 6.9 points compared to January.
Tariff race
The first rays of spring sunshine sparked optimism among Uzbek consumers. In March, there was a coordinated increase across all five sub-indices of the Consumer Confidence Index (CCI), reflecting an improvement in both evaluations of the current situation and future expectations.
However, the following month saw a prolonged decline, which bottomed out in June when the CCI dropped to 125.9 points.
A key factor influencing the decline in consumer optimism was the next stage of tariff liberalisation for energy resources. On 1 May, gas and electricity prices in Uzbekistan increased for the first time since August 2023. Furthermore, social consumption norms were introduced, meaning that any consumption above these thresholds would be charged at market rates.
By the end of June, utility services had become the leading factor in perceived inflation. Over half of those surveyed noted that the price rise in these services had been the most noticeable over the past month.
Orange mood
After June, consumer confidence in Uzbekistan started to rise again, with optimism regarding major purchases driving this growth, which lasted for two months. In July, this indicator increased by 7.6 points, and in August, it rose by another 3.6 points, reaching a yearly high of 92.3 points.
The seasonal decrease in the prices of certain staple foods also contributed to the boost in consumer confidence.
In July, the prices of summer-ripening vegetables dropped significantly: aubergines by 53.9%, tomatoes by 42.8%, sweet peppers by 41.3%, pumpkins by 38.5%, and cucumbers by 37.8%. The consumer index continued to rise through the end of summer, driven by the fall in food prices.
Autumn note
In September, all sub-indices declined in unison. Once again, the index for favourable conditions for major purchases dropped the most, by 5.4 points.
In October, consumer optimism in Uzbekistan grew once more, spurred by increases in social benefits and salaries in the public sector. On 1 September, pensions and allowances were raised by 15% as planned. A month later, the salaries of medical and educational professionals increased by 15%, while other public sector employees saw a 10% raise.
However, seasonal inflation, compounded by a sharp rise in propane prices, negated this positive effect, and for the final two months of 2024, the CCI declined, reaching 129.2 points in December.
Conclusion
Thus, the annual trend of the CCI in Uzbekistan last year was downward. However, the index remained in the positive zone, indicating a predominance of optimistic assessments. All sub-indices of the CCI fluctuated within the positive corridor, except for the index of favourable conditions for major purchases, which never rose above 100 during the entire observation period.
A telephone survey of 3,600 respondents in Uzbekistan, proportionally representative by gender, age, and region, is conducted every month by United Research Technologies Group (URTG) on behalf of Freedom Finance Global.
