BAG Business Climate Index improves in Georgia with current situation seen as “nearly normal”

BAG Business Climate Index improves in Georgia with current situation seen as “nearly normal”
By Iulian Ernst in Bucharest June 17, 2021

The BAG Business Climate Index in Georgia improved by 5.9 points q/q to 20.5 points in Q2 (on a scale from -100 to +100), with the current situation seen as “nearly normal” and expectations close to pre-crisis levels, the Business Association of Georgia (BAG) has announced.

Moreover, in this period, the assessment of the present business situation and business expectations (for a six-month period) improved, by 9.6 points and 0.9 points, respectively. While the current situation was assessed as balanced (with a score close to 0), the expectations were at just over 40 points - in line with where they were at before the onset of the crisis driven by the coronavirus pandemic.

In Q2, compared to Q1 of 2020, the BAG Business Climate Index improved in almost all sectors and was positive for all sectors, except for construction - in which the indicator worsened by 37.7 points. Notably, in Q1, among the sectors, the construction sector was the only sector with a negative business climate indicator.

The figures indicated a significant improvement in Georgia’s business climate compared to Q2 of 2020 - when the business climate was improving after the lockdown-induced collapse in both the current economic situation and expectations at the end of Q1. In Q2 of 2020, the BAG Business Climate indicator amounted to -0.8 points, while the business situation indicator amounted to -12.3, and the business expectations indicator was at 12.2.

It is worth noting that in Q2 of 2020, Georgia operated under a state of emergency and economic activity was staggered, while the positive outlook in Q2 of 2021 is attributed to the relaxing of the curfew, the inception of a vaccination program, the reopening of restaurants on weekends, announcements of scheduled international flights, and the opening of land borders starting from June.