For the first quarter of 2022, business confidence in Georgia decreased (by 13.3 index points) and reached 17.3. The highest decrease in business confidence is observed in service (-25.8), manufacturing (-20.8), and wholesale and retail trade (-16.1) sectors.

For the second quarter of 2021, BCI decreased by 1.7 index points and reached 1.7 after a significant increase in the previous quarter. The highest decline in business confidence is observed in retail trade, followed by the agriculture and construction sectors. The negative change in BCI for Q2 2021 is driven by pessimistic future expectations.

Geostat has published its rapid estimate of real GDP growth for the fourth quarter of 2020, and their estimated growth stands at -6.5%, which is 1.3 percentage points below the ISET-PI’s most recent forecast. The annual real GDP growth in 2020 amounted to -6.1%, which is 0.6 percentage point lower than our recent prediction. Economic activity fell sharply due to global pandemic, although the decline was mitigated by the relatively strong fiscal stimulus and lending.

For the first quarter of 2021, BCI increased by 32.1 index points and reached 3.4 after a significant deterioration in the previous quarter. Business confidence improved across all sectors, except retail trade, with the largest increase observed in the construction sector. The positive change in BCI, for Q1 2021, is driven by optimistic future expectations and improved past performance.

The COVID-19 pandemic raised concerns about the food security of many countries, in particular import-dependent developing countries like Georgia. Trade restrictions imposed by Georgia’s trade partners tightened the supply of some cereals and vegetables, signalling the risk of an increase in food prices.