In March 2024, Freedom Finance Global released its findings on consumer confidence, inflation, and devaluation expectations in four Central Asian countries: Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan. The report by Freedom Broker presents a mixed bag of results, with some countries experiencing record highs while others faced declines, reflecting the complex economic landscape of the region.
Kazakhstan: A Sharp Deterioration
The Consumer Confidence Index (CCI) in Kazakhstan saw its fourth consecutive decline in March, and the drop was steep. March marked the first instance since June 2023 where the CCI dipped into negative territory, falling below 100 points, indicating a prevalence of negative sentiments over positive ones. March's index stood at 95.1 points, plummeting by 5.6 points. The surveyed population's assessments and expectations of the economic situation in Kazakhstan suffered the most.
March witnessed a sharp decrease of 11 points in the subindex measuring changes in Kazakhstan's economic situation over the preceding 12 months, reaching a new low of 66.2 points across the 19-month survey period. Only 12.1% of respondents believed in economic improvement over the past year, compared to 53.2% who disagreed. This contrasted with February's figures of 17.6% and 43.7%, respectively. The negative trend was widespread across age groups, with the exception of those aged 45–59, who largely maintained their economic outlook. Young people under 29 years old showed the largest increase in negative responses, rising from 35% to 46.1%. Similar results, with 55% of negative responses, were observed across the other three age groups.
Regionally, three areas – Abay, Mangistau, and Aktobe – experienced the sharpest negative shifts, with the proportion of negative responses rising by 29, 28, and 26 percentage points, respectively. The Aktobe region recorded the poorest results, with two-thirds of residents negatively assessing economic changes over the past year. In contrast, the Turkestan region stood out with only 40.7% negative responses and 20.6% positive responses, indicating the best economic sentiment.
The subindex measuring expected changes in Kazakhstan's economic situation over the next year plummeted by 7.7 points in March, reaching 122.3, notably lower than the July 2023 - February 2024 average of 131.5 points but still higher than the first half of 2023. The proportion of respondents expressing positive sentiments about the economy's prospects for the next year dropped from 54.1% to 49.7%. Across age groups, there was a notable decline in positive responses, particularly among those aged 30–44, falling from 54.6% to 48.5%.
Regionally, the proportion of optimists regarding the economy declined sharply in the Abay, Kyzylorda, and Ulytau regions, with decreases of 31, 20, and 18 percentage points, respectively. In contrast, the Turkestan region maintained strong optimism, with 63.7% of respondents positively assessing future economic prospects.
Residents of Kazakhstan reported decreased inflation expectations, approaching the record lows of January. While 44.2% noted a price increase in the past month (down from 47.1% in February), the decline in expectations over a one-year horizon was marginal, from 60.1% to 58.8%. Notably, inflation expectations over a one-month horizon also decreased slightly, with the proportion expecting strong price increases falling from 18.5% to 17.5%. However, expectations for price growth to accelerate over the next 12 months rose slightly from 20.4% to 21.2%.
In March, devaluation expectations among Kazakhstanis slightly increased compared to February, despite a strengthening tenge against the dollar. The share of those expecting a weakening of the national currency over a one-year horizon rose from 50.5% to 52.7%. The credit confidence index remained stable, with a slight increase of 0.4 points, while the level of calm among Kazakhstanis dropped sharply, reaching record lows. Additionally, expectations for single-year unemployment growth continued to rise, reaching a record 42.6%.
Uzbekistan: Recovery After a Fall
Uzbekistan witnessed a recovery in consumer confidence following a dip in February. In March 2024, the CCI among Uzbek citizens rebounded, nearly fully recuperating from a steep decline in February. The index surged by 5.7 points, reaching 135.8 points, just 1.1 points shy of its peak in January. Across all five sub-indices, there was growth, with particularly strong improvements noted in assessments regarding the favorability of current conditions for major purchases.
A rise was seen in the sub-index measuring the favorability of current conditions for large purchases, which increased sharply by 8.2 points to reach 88.8 points in March. This increase reflects a shift in perception, with 42.2% of Uzbekistan residents viewing the present as an opportune time for significant purchases, up from 38.2% in February. This positive trend is observed across all age demographics, with the most significant increase among those aged 45-59, where the proportion of positive responses rose from 34.3% to 41.3%. However, young adults under 29 remain the most optimistic group, with 46.6% expressing positivity.
Regionally, the most substantial improvements were observed in the Andijan and Jizzakh regions, where the percentage of people noting favorable conditions for large purchases increased by 13 and 11 percentage points, respectively. March's standout region was Navoi, where an equal proportion of respondents viewed conditions favorably and unfavorably, making it the sole region without a majority of negative responses. Conversely, the Khorezm region, which led in February, experienced an eight-point drop due to decreased positivity. The Syrdarya region ranked lowest in March, with only 32.8% of respondents noting favorable conditions for large purchases.
Assessments of changes in personal financial situations also saw a rebound in March, with the sub-index rising by 6.4 points to reach 136.5 points. The proportion of positive responses increased from 58.5% to 63.5%, indicating a complete recovery from February's downturn. The greatest increase in positivity was among those over 60 years old, although they remain comparatively pessimistic. Young adults under 29 continued to exhibit the highest optimism, with 72% expressing positivity in March.
Regionally, notable improvements were seen in Andijan and Tashkent, with increases of 10.5 and 10.8 percentage points, respectively, in positive assessments of personal financial situations. Khorezm maintained its position as the top-performing region, with 70.6% of respondents expressing positivity. Tashkent, despite making significant progress, remained at the bottom of the rankings with a score of 55.3%.
Inflationary concerns decreased slightly in March, with fewer residents reporting strong price increases over both one-year and one-month horizons. Notably, gasoline prices rose by only 0.1%, while propane saw a 3.3% decrease. Meat and poultry remained the top concern for 45% of respondents, followed by gasoline and lubricants for 28.1%. Concerns about flour prices decreased by 4.3 percentage points compared to February.
Credit confidence rebounded in March, with an increased number of respondents considering it a good time for loans. Deposit confidence also recovered, with 41.7% of citizens believing it is a good time for deposits. Confidence in the stability of the situation returned to January levels, with 80.5% of respondents considering it a quiet time. However, pessimism regarding unemployment increased slightly from February to March.
Kyrgyzstan: Modest Growth Amidst Challenges
Kyrgyzstan saw modest growth in consumer confidence, with improvements in assessments of personal financial situations offsetting concerns about economic prospects. In March, Kyrgyzstan's CCI saw a slight uptick of 0.2 points, reaching 128 points. However, a mixed trend is evident across its sub-indices. While there's a more positive outlook regarding current and anticipated personal financial situations, there's a concurrent rise in pessimism concerning economic changes and prospects.
There was a recovery in the assessment of personal financial situations, with the sub-index for changes in personal finances increasing by 2.5 points to 124.1 points. This indicates a partial return to normalcy after a sharp decline in February. The proportion of individuals viewing their personal financial situation positively over the past year increased from 44% to 45.8%. Notably, there was significant growth in positivity among the youth under 29 and respondents aged 30-44. Regionally, notable increases in positivity were seen in Naryn, Batken, and Chui. However, Osh remained the region with the highest index, while Bishkek replaced Chui at the bottom of the rankings.
Conversely, economic estimates dipped slightly, with the sub-index for changes in the economic situation decreasing by 2.5 points to 130.4 points, its lowest since November. Despite this, the majority still viewed changes in the economy positively over the past year, although the share of such individuals decreased slightly. Pessimism increased among respondents aged 30-44, while the older generation over 60 remained the most optimistic. Regionally, there was a decline in positivity in Osh but increases in Issyk-Kul and Naryn, with Jalal-Abad leading in positivity.
Inflationary sentiments saw a slight increase, with more Kyrgyzstanis feeling a very strong increase in prices over the past month. However, the increase in expectations for price growth over the next 12 months was modest. Official inflation in the country accelerated slightly in March after five months of slowdown.
Expectations for devaluation increased slightly, with more residents anticipating a weakening som against the dollar over the next year. Credit confidence improved for the second consecutive month, reaching its highest levels since the study began, while deposit confidence decreased slightly. Anxiety levels among the population increased for the second consecutive month, along with rising expectations for an increase in unemployment.
Tajikistan: High Confidence Despite a Decline
In March, Tajikistan experienced a notable decrease in its consumer confidence index, marking the first decline in three months, dropping from 149 to 146 points. This decline was reflected across all five sub-indices, with the most decreases observed in assessments of changes in the economy and personal financial situations over the past year. Despite this decline, Tajikistan continues to maintain the highest performance in Central Asia, with the current result still reflecting a relatively high level of positivity.
Economic assessments saw the largest drop among all sub-indices, particularly in evaluating changes in the economic situation over the past 12 months, which fell to its lowest level since October last year. The share of respondents with positive views decreased, especially among the 30–44 age group. However, the older generation over 60 remained the most optimistic. Regionally, Dushanbe was the only area with a positive increase in optimism, while the largest decrease was observed in areas of republican significance.
Assessments of changes in personal financial situations also declined, reaching the lowest point since October 2023. The share of positive responses decreased across all age groups, with the most drop among the 30–44 age group. Despite this, young people under 29 retained the highest level of positivity. Regionally, Dushanbe showed a slight improvement, while the sharpest decline was observed in the Gorno-Badakhshan Autonomous Region.
Inflation estimates and expectations in Tajikistan showed a general decrease in March, despite a slight increase in the perception of rising prices over the past month. However, expectations for price increases over the next year decreased. Official inflation data for March has not yet been released, but there was a slight decrease in annual inflation in February. Concerns about rising prices were particularly focused on flour, although there was also increased worry about meat, poultry, vegetables, and fruits.
Devaluation expectations decreased in March compared to February, with expectations for weakening in the national currency reaching record low levels over a one-year horizon. Credit and deposit confidence indices showed mixed movements, with a slight increase in confidence regarding loans but a rise in negativity concerning deposits. Expectations for unemployment increased sharply for the second consecutive month, although they remained lower than previous levels observed in July–October 2023.
March 2024 presented a mixed picture of consumer confidence across Central Asia. While some countries saw record highs, others faced challenges that contributed to declines in confidence levels. Economic uncertainties, including inflationary pressures and devaluation expectations, continue to shape consumer sentiment in the region. However, amidst these challenges, there are signs of resilience and cautious optimism among citizens, highlighting the dynamic nature of Central Asia's economies.
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