ISET

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.

 

 

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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.

 

 

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