Deterioration persists in Georgia's business environment, according to Economist Khishtovani.
📣 Hey there! In Q2 2025, Economist Giorgi Khishtovani highlighted that Georgia's business climate has been on a steady decline since its peak in Q2 2023, as per the BAG Index. Here's the lowdown.
Except for trade, all major sectors have shown signs of stagnation. The trade sector, however, has shown strong momentum, attributed to aggressive marketing and promotional campaigns. But whether this trend continues remains a question mark.
The BAG Index, a primary benchmark for monitoring economic trends, pointed to construction, industry, and services recording worsening business conditions. The overall business conditions slightly improved due to the gains in trade, but future business expectations have deteriorated across all sectors, particularly in industry and services, due to challenges like access to financing and weak demand.
Looking ahead, Khishtovani sees two scenarios: an optimistic case where the economy stabilizes around its current levels if trade and construction continue recovering, and a pessimistic scenario where the current gains are short-lived, resulting in further decline in the overall business climate in the upcoming quarters.
In a broader context, Georgia’s economy displayed strong growth momentum with an estimated 9.3% year-on-year GDP growth in Q1 2025. But, employment data showed an increase in persons receiving monthly salaries by 2.2% compared to the previous year, with job vacancies decreasing notably, suggesting some labor market adjustments or challenges.
This nuanced situation would be the focus of discussions by economic experts like Khishtovani, who would likely highlight the need to address structural or external challenges to maintain sustainable growth and improve business confidence. Stay tuned for updates! 📅😊
In light of the BAG Index's findings, it appears that while the trade sector is experiencing growth, challenges in access to financing and weak demand are causing concerns about the future business expectations in sectors such as construction, industry, and services. Economic expert Giorgi Khishtovani sees this complex economic situation as an opportunity to address structural or external challenges and improve business confidence for sustainable growth.
