Georgian Business Association names main problem for business in Georgia

REGION  28 March 2024 - 14:22

The shortage of specialists has become the main problem for business in the first quarter of 2024, according to a study by the Business Association of Georgia (BAG).

The study notes that the number of companies that believe factors hindering their operations increased by three percentage points compared to the fourth quarter of 2023, according to Sputnik-Georgia.

In the first quarter, five main reasons hindering business in Georgia were identified - lack of specialists, legal and administrative barriers, labour shortage, instability of the national currency and low demand.

At the same time, construction companies experience the greatest problems with the lack of specialists and the instability of the national currency, but representatives of the industrial sector more often encounter legal and administrative barriers.

In the trade sector, the main problem is the lack of labour, while representatives of the service sector complain about low demand.

At the same time, the level of specialist shortages in the first quarter of 2024 increased from 48% to 67% compared to the same period last year, and complaints about the instability of the national currency decreased over the year from 37% to 20%.

In the first quarter of this year, 47% of companies surveyed (1% more than in the fourth quarter of 2023) tried to find financing, and 37% of them said that access to finance in Georgia is a problem.

Access to finance is most problematic for small companies, while large enterprises find it easier to find financing. In addition, most companies stated that they were funded from local sources.

In the first quarter of 2024, the business climate indicator is positive in all sectors. However, in the first quarter of 2024, compared with the fourth quarter of 2023, this indicator improved in industry and trade, and worsened in construction and the service sector.

In this period, the assessment of the current state of business improved in the industrial and trade sectors, and worsened in the services and construction sectors.

The trade sector assessed the current situation most positively, which may be due to an increase in sales (the largest share of companies in the trade sector (38.9%) recorded an increase in sales in the first quarter of 2023).

In the first quarter of 2024, compared to the previous quarter, the proportion of companies expecting the local currency lari to depreciate against the dollar in the next six months decreased (by 26%). At the same time, 86% of companies do not expect the lari exchange rate to change in the next six months.

The Business Association of Georgia was founded in 2009 and unites more than 600 small, medium and large companies, including banks, gas station chains, pharmacy chains, construction companies, communications companies and large supermarket chains. Association member companies took part in the survey from February 20 to March 7 of this year.

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