Georgia's economy is showing signs of entering a difficult period of stagnation, according to economist Giorgi Khishtovani, who says weakening demand has become one of the biggest challenges facing businesses. Speaking on TV-program Analytics, he commented on the latest BAG Index survey, which found that 32% of companies now identify weak demand as a key obstacle to their operations.
Khishtovani noted that demand had largely disappeared as a business concern after 2022, making the latest increase particularly significant. He pointed out that only 11% of businesses cited weak demand as a problem in the fourth quarter of 2025, compared with nearly one-third in the second quarter of 2026, suggesting that more companies are struggling to attract customers.
According to the economist, several economic indicators suggest conditions are gradually deteriorating. He argued that while the government highlights record export figures as evidence of economic strength, those numbers are largely driven by increased petroleum exports rather than broad-based growth in domestic production or traditional exports.
The comments come after the Georgian Business Association's latest BAG Index showed a worsening business environment, with weak demand joining labor shortages and legal and administrative barriers among the most significant challenges reported by businesses.
