Quarter 4 2019, Macro Review | The 2019 Georgian economy – a year in review
03 February 2020

According to Geostat, the 2019 real GDP growth in Georgia was 5.1% year-over-year (YoY). This figure moderately surpassed NBG’s, ADB’s, EBRD’s, IMF’s and the World Bank’s latest growth projections for 2019, which range from 4.5%-4.7%. However, the real winner in this race was ISET-PI’s annual GDP growth forecast; in May 2019, we predicted a 4.9% annual growth. Although 2019 may now seem like the distant past in light of the coronavirus epidemic, it is worth noting that Georgia headed into 2020 with strong momentum. Therefore, the fact that the 2019 growth outcomes were strong will likely soften the impact of COVID-19 on the economy in 2020.

Georgian economic growth in 2019 was driven by both increased domestic and external demands, with strong fiscal stimulus and greater activity on the credit market as the main internal drivers of growth. Additionally, the depreciated effective exchange rate stimulated net exports, and current account deficits improved significantly. Increased money transfers also led to accelerated economic growth. Due to the Russian ban on air travel to Georgia, revenues from international travelers increased only marginally, while foreign direct investment (FDI) stood at the same level as in 2018, having no impact on growth in the reported period.