The index is a measure of the sentiment and expectations of consumers towards the economy and their own financial situation.
According to the study, the first nine months of 2011 saw the lowest levels of consumer confidence since July 2007 (the inception of the study).
Chief economist and Director of Economic Research and Analysis Department at Byblos Bank, Nassib Ghobril, said that although the study was initiated in July 2007, it could not be released before now. “We needed enough data to conduct the study, thus we compiled data over 51 months,” he said. Ghobril said that the second reason for delaying the release of the index was that publishing the index required apt political conditions as the study involves the impact of specific political events on consumer confidence trends.
The study shows that consumer confidence was highest in 2009. Consumers with high confidence in future economic conditions are likely to spend more than those with low confidence.
"The results of our Index show that consumer confidence in Lebanon is significantly affected by political events, whether they are negative or positive," said Ghobril.
The index is calculated on a monthly basis, with January 2009 as its base month. Ghobril said that 2009 “was the only normal year, which did not include political shocks.” He said that consumer confidence in January 2009 was 96.7, equivalent to the average score throughout the entire year.
Ghobril said that the sharp movements in the Consumer Confidence Index were mainly induced by political shocks. He also said that consumer confidence was highest between May 2008 and June 2010, but that it started to drop systematically when political tensions resurfaced in the second half of 2010.