Economist Giorgi Khishtovani declared that Georgia’s business climate has been declining since its peak in the second quarter of 2023. Commenting on the latest BAG Index results for Q2 2025, he said signs of stagnation are visible across all major sectors except trade.
The BAG Index, published by the Business Association of Georgia, tracks business sentiment quarterly and remains a primary benchmark for monitoring economic trends in the country.
“Only the trade sector showed strong momentum this quarter, likely driven by aggressive marketing and promotional campaigns, but whether this trend continues is uncertain,” Khishtovani noted. He pointed out that construction, industry, and services all recorded worsening business conditions.
Overall, current business conditions slightly improved, largely due to gains in trade, still business expectations for the future have deteriorated across almost all sectors. Access to financing and weak demand remain major challenges, especially in industry and services.
Looking ahead, Khishtovani offered two possible scenarios. In an optimistic case, stabilization may occur around current levels, if trade and construction continue recovering. However, he sees a pessimistic scenario as more likely outcome as current gains are short-lived and, as a result, overall business climate will decline further in upcoming quarters.
