Kondycja gospodarstw domowych : II kwartał 2020 Badania Koniunktury Gospodarczej Instytutu Rozwoju Gospodarczego SGH

Abstract

In the 2nd quarter of 2020, consumer confidence deteriorated sharply. The IRG SGH consumer confidence indicator (IRGKGD) declined by 40.5 pts (to -50.2 pts), which is the record high decrease. Even during the 2008-2009 financial crisis, the cumulated drop over 4 consecutive quarters was much lower, rounding up to 35 pts. All components of the indicator diminished, with the balance of fears of getting unemployed soaring by almost 63 pts to hit record high. Currently, more than 91% of consumers expect an increase in unemployment in the country in the upcoming 12 months (ca. 40% in the previous quarter, and ca. 36% a year ago). The majority of consumers (over 70%) expect unemployment to rise "significantly" (compared to 12% one year ago). Despite the fact that the European Commission forecasts the mildest (amongst EU economies) recession in Poland in 2020 (4.3%), the fear of rising unemployment in Poland is very strong, with only Hungary, Portugal and Estonia noting higher figures. For the sake of comparison, the recession in Germany is expected to be 6.5% while 51% of consumers declare significant concern about rising unemployment. The survey participants express deep pessimism about the overall situation in the economy. The balance dropped by approx. 43 pts. Negative assessment of the macroeconomic environment results in poor prospects of financial situation of households (the respective balance declined by as much as 37 pts) and diminishing propensity to save. On the whole, the COVID-19 crisis brought about a downturn in consumer confidence which is likely to last over the next quarters.(original abstract)