ISET

According to the preliminary statistics released by GeoStat, Georgia’s real GDP growth was 4% year over year (YoY) in Q2 2017, which fell short of the 5.8% that had been expected by ISET-PI GDP forecast made in July. This shortfall was driven not by weak performance, but overly optimistic predictions of ISET-PI’s empirical model, influenced by high actual growth in the first quarter (5.1% YoY). It is notable that the Georgian government’s target of the real GDP growth (4%) does not seem to be overambitious; the National Bank of Georgia also leaves its forecast for annual growth unchained in the latest monetary policy report (August 2017).

According to the preliminary statistics released by GeoStat, Georgia’s GDP in Q1 of 2017 grew by 5.0% YoY – the highest growth rate since Q3 2014. What lies behind such spectacular growth numbers? First and foremost, it stems from the genuine improvement in the economic situation in the region, which has resulted in increased exports, FDI, tourism, and remittances. Secondly, the sharp increase in the growth rate in December 2016 “lifted” the GDP base and allowed normal GDP improvements to look even better compared to last year’s levels. In April, however, the real GDP growth rate fell sharply to 2.1% YoY, somewhat dampening hopes for swift growth in 2017.

Our Partners