BAKU, Azerbaijan, Feb.20
By Tamilla Mammadova – Trend:
ISET-PI’s Business Confidence Index (BCI) for Georgia increased by 32.1 index points in the first quarter of 2021, reaching to 3.4 points after a significant deterioration in the previous quarter, Trend reports via the ISET-PI, a think-tank based at the International School of Economics of Tbilisi State University.
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 Past Performance Index, which considers the business sector’s assessment of their own economic performance in the previous quarter, increased by 12.4 points compared to 4Q2020, and reached -29.2 for 1Q2021. The construction sector has the greatest improvement in past performance.
The Consumer Confidence Index (CCI) has declined slightly after a recovery that lasted about 6 months. In December, the index dropped by 5.5 index points and the pattern is similar for both sub-indices: Present Situation Index went down by 5.4 and Expectations Index by 5.6.
"Increased daily cases of the COVID-19 led us to maintain the same level of restrictions (public transport did not resume working, shopping malls were closed, etc.) that had significant social costs for the Georgian population, has disrupted New Year celebrations in Georgia, and has soured consumers’ moods," the report said.
"We have constructed a dynamic model of the Georgian economy, which assumes that all economic variables, including GDP itself, are driven by a small number of factors that can be extracted from the data well before the GDP growth estimates are published. For each quarter, ISET-PI produces five consecutive monthly forecasts (or “vintages”), which increase in precision as time passes. Our first forecast (the 1st vintage) is available around five months before the end of the quarter in question. The last forecast (the 5th vintage) is published in the first month of the next quarter," the report said.
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