Business Confidence Index drops by 18.7 points in Georgia
Baku, Azerbaijan, September 4
By Tamilla Mammadova – Trend:
Business confidence has deteriorated during thethird quarter of 2019 and dropped to 8.3 index points in Georgia, which is 18.7 index points below the figure of the previous quarter, Trend reports citing the research of international School of Economics at Tbilisi State University (ISET).
Expectations in the private sector in Georgia decreased significantly by 23.7 index points, dropping to 21.7 index points. Business performance over the past three months decreased as well, reaching nearly 0 points (down from 23.0), indicating a downturn in production/turnover/sales. Thus, reductions in both business expectations and past performance have led to a fall in the overall Business Confidence Index (BCI).
BCI decreased in almost all economic sectors, namely in the retail trade (-45.5), financial (-24.4), construction (-21.5), manufacturing (-19.0) and service (-16.6) sectors. The exception was in agriculture, in which the BCI improved by 41.8 index points.
Business confidence during the third quarter of 2019 dropped for both large firms (-20.2) and for SMEs (-1.9).
The Sales Price Expectation Index decreased moderately. Businesses in service and manufacturing predict lower prices compared to the previous quarter, while other sectors expect higher prices.
Expectations worsened for large businesses as well as for small and medium-sized enterprises (SMEs), while past performance decreased for large businesses and moderately improved for SMEs.
The main factor that continues to limit business activities for large businesses is lack of demand, while for SMEs the limiting factor is access to finance.