The Georgian Business Confidence Index (BCI)* has improved quite substantially, reaching 29.0 index points, which is an 11.5 index points improvement over the last quarter. The second-quarter increase in the BCI was mostly driven by strong performance in the last quarter and quite a significant improvement in expectations.

ISET’s Khachapuri Index kept declining in April, which is in line with seasonal trends. The average cost of cooking one standard Imeretian khachapuri currently stands at 3.32 GEL, which is 2.5% lower month-on-month (compared to March 2017), and 4.9% above year-on-year (compared to April 2016).

By the end of April, food prices increased by 4.0% on an annual basis (that is, compared to April 2016) but decreased by 0.9% on a monthly basis (that is, compared to March 2017). During the last two weeks of April, onions, potatoes, and tomatoes showed the biggest increase in prices by 23.2%, 13.5%, and 10.1%, respectively.

With a total of 21 611 property sales, Georgian real estate market in Q1 2017 grew by 6.1% (YoY). 194 new buildings with total area of 301.1 thousand sq.m were completed in Tbilisi during Q1 2017.

We started forecasting the annual growth rate at the start of 2014 (see our January 2014 and February 2014 publications for a note on methodology). Based on February’s data, we expect annual growth in 2017 to be 4% in the worst-case or “no growth” scenario, and 5.1% in the best-case or “average long-term growth” scenario. Our “middle-of-the-road” scenario (based on the average growth in the last four quarters) predicts a 4.3% real GDP growth in 2017.