The Georgian Business Confidence Index has decreased marginally (-1, QoQ), but at 25.0 it remains stable and significantly more positive compared to the same quarter, last year (14.8).
With 38% of business executives reporting ‘improved’ performance in the last three months, the past performance index posted a substantial increase, rising 7.9 points to a robust 30.4. The agriculture sector saw the highest increase.
The third quarter decrease in the index was mostly driven by business optimism which has dropped to below the Q2 2016 (-12.7, QoQ) level, but remained higher than Q3 2015 at 27.2 percentage points. The majority of business respondents expect their economic performance to remain unchanged and 25% expect improvement. Expectations about the end of the summer season have weakened in all sectors.
The Georgian Business Confidence Index (BCI) continues to improve. Unlike last quarter, the second quarter increase in the index was mostly driven by a significant improvement in performance rather than in business expectations, which kept rising albeit at a marginal pace.
Overall, the BCI gained 10 points (on a [-100/100 scale]) compared to Q1 2016. The expectations of the private sector in Georgia improved and reached 46 index points (up from 38 points in Q1). Businesses’ performance over the past 3 months increased significantly and became positive, rising from -0.7 to 19.7, indicating a rise in production/turnover/sales. The performance of the past 3 months alongside improved expectations thus maintained overall the BCI at a stable, optimistic level and trend.
The significant improvement in the BCI was counter-cyclical. In the previous two years, performance in Q2 was the poorest of all four quarters, even reaching a historic minimum level in Q2 2015.