BCI in the fourth quarter of 2018 has worsened, dropping to 29.9 index points, which is a 5.5 index point loss over the previous quarter. The BCI drop is based on the worsening of past performance and expectations in many business sectors. Compared to other sectors, manufacturing and agriculture assessed their past performance and expectations the most pessimistically. In contrast, the retail trade sector is the most positive.

Recently, Geostat has released its preliminary estimate of real GDP growth for the third quarter of 2018. The Q3 growth rate now stands at 4.0%, which is 3.2% below the ISET-PI’s last forecasted value. As a result, the estimated real GDP growth for the first nine months of 2018 amounted to 4.9%. ISET-PI revised its forecast of real GDP growth for the fourth quarter of 2018 to 3.7% - down from 6.4% in October.

In October 2018, Georgian power plants generated 783 mln. kWh of electricity. This represents a 5% decrease in total generation, compared to the previous year (in 2017, total generation in October was 828 mln. kWh). The decrease in generation on a yearly basis comes from and decrease in hydropower (-1%) and thermal power generation (-17%), more than offsetting the increase in WPP generation (+4%).

ISET’s Khachapuri Index continued an increasing trend in October 2018, which is very much in line with the annual seasonal trend. The average cost of cooking one standard Imeretian khachapuri currently stands at 3.59 GEL, which is 1.1% higher month-on-month (compared to September 2018), and 1.2% lower year-on-year (compared to October 2017).

Growth projections for the 3rd and 4th quarters of 2018 were revised downward by less than 0.1 percentage points. They now stand at 7.2% and 6.4% respectively. Recently, Geostat published its preliminary estimate of real GDP growth for August, which now stands at 2%. As a result, the real GDP growth estimate for the first eight months of 2018 was reduced to 4.8%.