ISET

According to Geostat estimates, real GDP grew by 4.3% year over year (YoY) in April 2016. Although the growth rate showed an upward trend from the beginning of the year, the ISET-PI forecast for Q2 and Q3 has remained at 4.2% and 4.3%, the same as in previous predictions. This means that the real growth rate is expected to stabilize at the 4-4.5% level in the next months. The positive dynamic in the real GDP growth rate has been complemented with increasing trends in the consumer and business confidence indices in recent months. Unlike last quarter, the second quarter increase in the BCI was mostly driven by a significant improvement in performance rather than in business expectations, which kept rising albeit at a marginal pace. In terms of the CCI, the current situation component increased, but this was somewhat tempered by lowered expectations. Despite this, the overall CCI still climbed, resulting in the highest CCI level since January 2015 (see these links for the full reports: CCI, BCI). Download the full report

According to Geostat’s rapid estimates, real GDP grew by 3.4% in March, while the growth rate for Q1 stood at 2.3% year over year. The estimated first quarter growth was 0.5 percentage points less than ISET-PI’s GDP forecast for the quarter. We have updated our forecast for Q2 based on the new information and lowered it from 5% to 4.2%; at the same time, the Q3 forecast was revised upward to 4.3%.
Different international and domestic financial institutions have slight variations in their forecasts for Georgia’s year-over-year real GDP growth rate in 2016. The ADB and IMF both reduced their forecasts by 0.5%, now predicting 2.5% annual growth. In contrast, EBRD revised its forecast upward to 3.4% (coinciding with the value predicted by the ISET-PI forecast model), while the World Bank annual forecast stood at 3%. The National Bank of Georgia predicted 3% growth earlier in the year, and ISET-PI (in our “middle-of-the-road” scenario forecast) predicted a 3.4% real GDP increase in 2016. Download the full report

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