According to Geostat’s rapid estimates of GDP growth, Georgia’s economy continues expanding at a moderately high pace, reaching 5.2% in the first quarter of 2018. GDP growth was mainly driven by an enhanced external environment, improved business confidence, credit expansion, and fiscal stimulus. Geostat’s Q1 growth figure is higher than the National Bank of Georgia’s (NBG) 4.8% projection for annual growth in 2018 but falls behind ISET PI’s annual GDP growth forecast of 5.7%.

BCI in the second quarter of 2018 has improved, reaching 39.6 index points, which is an 8.3 index point gain over the previous quarter. The improvement in Business Confidence is in line with the overall positive country performance (Geostat estimated 5.2% GDP growth in Q1 2018). The BCI increase is based on very high expectations and profitable past performance in almost all business sectors. Compared to other sectors, manufacturing assessed their past performance and expectations the most positively. In contrast, the agriculture sector is the most pessimistic, reflecting a low season in production.

Thanks to a significant increase in the private sector expectations, BCI in the first quarter of 2018 has improved yet again (for the 2nd consecutive quarter), reaching 31.4 index points, which is a 3.2 index point gain over the previous quarter. Almost 60% of participating business executives expect their business will improve over the next three months.

The Georgian Business Confidence Index (BCI)* has increased slightly, reaching 28.0 index points, which is a 1.2 index points gain over the previous quarter. Against weakening expectations, the fourth quarter improvement in the BCI was mostly driven by a notable increase in the Past Performance Index.

The Georgian Business Confidence Index (BCI)* has decreased slightly, reaching 27.0 index points, which is a -2.0 index point loss over the previous quarter. The third-quarter drop in the BCI was mostly driven by the notable decline of the Expectations Index, which judging from the previous quarter's findings, may be explained by private sector realignment with reality rather than by worsened economic conditions.