The ISET Policy Institute has once again demonstrated its relevance and focus on regional economic research with the publication of a research paper in the 117th issue of the Caucasus Analytical Digest (CAD), a bimonthly online magazine. The Institute’s article, 'International Diversification of Agricultural Trade of Armenia, Azerbaijan, and Georgia', was written by Phatima Mamardashvili, Salome Gelashvili, Ia Katsia, and Salome Deisadze and examined the agricultural trade relations of the three South Caucasus countries from 2002-2018.

Recently, Geostat has released the preliminary estimate of real GDP growth for the second quarter of 2020, which now stands at -12.6%. The real GDP growth rate contracted by 7.7% and 5.5% year-on-year in June and July 2020, respectively. Consequently, the estimated real GDP for the first seven months of 2020 amounted to -5.8%.

Geostat has revised its rapid estimate of real GDP growth for the first quarter of 2020. The estimated growth now stands at 2.2%, which is 0.7 percentage points above the average growth rate previously estimated for Q1. The real GDP growth rate contracted by 16.6% and 13.5% year-on-year in April and May 2020, respectively. Consequently, the estimated real GDP for the first five months of 2020 amounted to 5.4%.

From a trade perspective, the most important aspects of the EU-Georgia Association Agreement, signed on 27 June 2014, including the Deep and Comprehensive Free Trade Area (DCFTA), are the Sanitary and Phytosanitary (SPS) measures and the food safety standards and technical regulations required for access to European markets. Georgia’s export to the EU is still rather limited, and one possible cause for this deficiency, amongst others, is the limited capacity to comply with food safety regulations and standards.

In the second quarter of 2020, BCI decreased by 53.0 index points reaching an all-time low of -27.2 points. Business confidence deteriorated significantly across all sectors. The largest decline was observed in retail trade, followed by the service industry. The decrease in BCI was driven by worsened past performance as well as drastically pessimistic future expectations.