Bank Hapoalim || An increase in the consumer confidence index of Bank Hapoalim and KANTAR in January 2021

The consumer confidence index of Bank Hapoalim and KANTAR Telesker rose in January 2021 by 1.1 points to 122.6 points (April 2002 = 100). The index for the current situation rose by 0.4 points and the index for expectations rose by 1.7 points.

Bank Hapoalim economists: The effect of the third closure, which began in December, on consumer confidence was low. The high rate of immunization and the rise in the prices of financial assets have led to an improvement in the perception of the future situation. The effect of closures on private consumption decreases over time, and in the fourth quarter of 2020 private consumption increased despite the large number of restrictions. The level of consumer confidence is still significantly lower than at the beginning of last year before the pandemic.

Much of the restrictions on trade and leisure activities were lifted today, and we estimate that in the coming months we will see a sharp increase in private consumption. Households increased their savings during the crisis, and the value of their financial assets rose as well. In our opinion, this effect on consumption is expected to be relatively short-term, and later in the year we will see moderate effects on consumption on the part of the labor market, and the tightening of conditions for receiving unemployment benefits for those staying in the IDF.