For the fourth quarter of 2020, BCI decreased by 18.7 index points and reached -28.6 after a significant improvement in the previous quarter. Business confidence deteriorated across all sectors, except retail trade and financial. The largest decrease is observed in the construction sector. The negative change in BCI, for Q4 2020, is driven by significantly pessimistic future expectations.

ISET-PI’s forecast of real GDP growth for the third quarter (July-September) of 2020 remains at -11.6%, unchanged from last month’s prediction. The third estimate for the fourth quarter (October-December) growth forecast stands at -11.8%. Notably, our econometric model depends only on retrospective information (past observations), thus, the abnormally large negative growth of real GDP during the state of emergency period causes an overestimation of the contraction in the following quarters.

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%.