Business Association of Georgia Publishes BAG Index report of Q1 2025

28 Mar '25

The BAG Index is a joint product of the Business Association of Georgia, PMC Research Center, and the Ifo Institute for Economic Research.

The Business Association of Georgia has been publishing the BAG Index quarterly since 2019. The BAG Index includes assessments from senior managers of association member companies and their business groups regarding the business climate, employment barometer, and investment environment.

The survey for the first quarter of 2025 was conducted between February 17 and March 5. As a result of the survey, companies positively assessed their current situation and expectations. In the first quarter of 2025, compared to the fourth quarter of 2024, the business climate indicator decreased by 3.3 points; however, expectations for the next 6 months improved by 9.6 points, indicating positive dynamics.

It should also be noted that comparing the first quarter of this year to the first quarter of last year, business expectations for the next 6 months improved in the trade, services, and construction sectors, and slightly decreased in the industrial sector, thereby revealing positive dynamics in this regard as well.

The employment indicator is also noteworthy: specifically, in the first quarter of 2025, 23% of surveyed companies stated that their number of employees had increased. As for expectations for the second quarter of 2025, 29% of surveyed companies expect the number of employees to grow. In the first quarter of 2025, the highest increase in employee headcount was recorded in the construction/development sector, while expectations for the second quarter of 2025 show the trade sector leading with the most positive assessments.

Among factors hindering business, the instability of the national currency exchange rate took first place, whereas this factor had previously occupied fourth or fifth place among obstacles for a long time. This points to the sensitivity of Georgian business, and consequently the economy, to the exchange rate of the national currency.

It should also be noted that according to the majority of surveyed companies, expectations regarding the GEL exchange rate over the next six months are positive, with companies expecting the exchange rate to remain stable. This comes as a result of the recent stabilization of conditions in the domestic foreign exchange market.

You can view the research report at the link.