Page 14 - GEORptOct22

Georgia’s business confidence index increased by 2.6 points in Q3
US ranks Georgia as a good place to do business
followed by Greece (85,000), Ukraine (65,000), Azerbaijan (49,000), the USA (39,000), Armenia (38,000), Germany (25,000), Italy (16,000) and other countries (93,000). During the study period, among the main receiving countries, the largest increase in immigrants was observed in the USA (77%), Italy (60%) and Armenia (47%).
The study highlighted that remittances have a strong impact on Georgia's economy connected to high emigration. Remittances to Georgia were at $2.35bn in 2021, which is 13% of the country's GDP. The volume of remittances has increased by 76% since 2012. According to the study, if we compare Georgia’s economic dependence on remittances with the performance of other countries, the following picture emerged in 2020, Georgia ranked 23rd in the world in terms of remittances to GDP ratio and second among the Eastern Partnership countries after Moldova.
According to the research, Russia has been the main source of remittances to Georgia over the past decade, followed by Italy, the US and Greece. However, the study says that since 2012, the volume of remittances from Russia has decreased by 45% and amounted to $0.41bn. Over the same period, remittances from the US grew by 284% and from other countries by 310%. According to the study, along with the reduction in the number of Georgian emigrants in the post-Soviet countries, their share in remittances has also decreased over the past decade. At the same time, the share of remittances from the European Union increased. In 2012, the share of post-Soviet countries in remittances was 59%, and in 2021 was 27%. At the same time, the share of the EU increased from 25% to 41%.
Georgia's business confidence index (BCI) increased by 2.6 index points and reached 17.7 during the third quarter of 2022.
The highest increase in business confidence was in the construction sector, an increase of 13.8 points.
The positive change in the BCI for Q3 2022 was driven by improved past performance, reads the latest publication of ISET Policy Institute, an independent economic policy think tank in Georgia focusing on the South Caucasus. The Past Performance Index, which considers the business sector's assessment of their economic performance in the previous quarter, increased by 16.2 points compared to Q2 2022 and reached 6.7 for Q3 2022, with the service (38.7) and construction (30.8) sectors showing the most significant improvements.
The Expectations Index, which reflects business optimism, decreased, amounting to 25.6 index points. Expectations for Q3 2022 fell for all sectors, except for the construction and service sectors.
The Sales Price Expectations Index decreased by 11.6 and settled at 29.8, indicating a decline in the share of businesses anticipating charging more for their products over the upcoming three months. The Sales Price Expectations Index has decreased for all sectors except for the trade sector.
Lack of qualified labour force and limited access to financing are the most significant impediments for large companies. The lack of demand and limited access to funding are indicated as significant constraints by small and medium enterprises (SMEs).
Georgia ranks high in the South Caucasus as a "good place" to invest but it is not without challenges, according to the 2022 Investment Climate Statements released by the United States Department on July 28.
The report noted that overall, business and investment conditions in the country were "sound", and Georgia "favourably" compared to the other countries in the region.
14 GEORGIA Country Report October 2022 www.intellinews.com