“Yesterday all my troubles seemed so far away,” says one of the most famous songs. The elder generation likes this song very much. However, everyone likes the words and idea behind this song.
Whoever you ask how he/she feels, they will say that in the past their business was better and will start complaining (however, in the past they would complain too). If we look at the consumers’ reliability index published by the Central Bank, we will see that the situation has changed. Now most people say that this year it is better than last year. However, fewer people believe in better future now.
It is worth understanding what the consumer reliability index means. Consumers are asked six questions, three out of which concern the current conditions (current quarter), the other three questions (which are the same) concern the coming quarter. The questions concern large acquisitions, change of incomes and evaluations concerning the general situation of the Armenian economy. A balance is made based on the positive and negative answers, which is compared to the precious period.
For example, 27.9% of the respondents evaluated the general economic situation positively. In the previous quarter (in the 4th quarter 2011) only 22.4% responded positively, and during the first quarter of the previous year – 26.7%. This result is put together with the other two results and made the index of current conditions. The same method s used to evaluate the index of future conditions (expectations), and based on these two indices the final CRI is made. Looking at this chart will help to understand what this means.
What consolations can be made based on this CRI index? The Central bank’s statement started with the following: “The CRI has grown by 3.5% compared to the same quarter of the previous year, in case when in the previous quarter there was reduction by 5.3%.” This means that the index has positive tendency, but still there are a number of questions about it.
Even if there was a growth of the reliability index, still the reliability on the part of consumers is below 50%. The situation is the same about the growth of incomes as only 38.3% of the respondents said that there had been growth of incomes, even though in the beginning of the previous year the income growth reliability index was less.
The situation is totally different concerning future conditions index. Over 50% of respondents have positive expectations for the coming quarter. Generally the expectations of 53.2% of respondents are positive. Maybe this is connected with the human character, which means that people don’t want to be pessimistic about their future. The level of pessimism has reduced compared the first quarter of the previous year as last year the level of positive expectations index was 57.5%. During one year the level of positive expectations ahs reduced by 7.4%. Even though the level of incomes and optimism about incomes has grown by 24.3%, the level of overall expectations has reduced. The level of positive expectations concerning family employment is 55.4% (instead of 56.8 in the first quarter 2010 and 49 in the fourth quarter 2011).
Finalizing the above said, people say that the current conditions of the economy are better than last year. This means that now they are more satisfied than one year ago. On the other hand, people are more skeptical about the future. Today is better than yesterday, but hardly tomorrow may be better than today.
Two days ago the National Statistics Service published the preliminary report on macroeconomic indices for January-February and reported that the economic activity index was 5.6%. The statistics also reports that the average salaries have grown twice faster (6.4%) than prices (3%). On the one hand the official statistics reports that people have reasons to be more optimistic about the presence, on the other and it is difficult to understand why people are less optimistic than last year. The same government, in the tenure of which the situation became better as the official statistics reports, is promising to work better and do even more. In fact people do not believe in those promises. People do not believe, and later complain that nothing is changing.