Quarter 2 2017, Macro Review | Strong Q2 data puts Georgia's annual growth on track to reach target
14 September 2017

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 the 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).

Data on the second quarter of 2017 suggests that the Georgian economy continues to recover after sluggish growth in the previous years, both due to improvements in the domestic and external environment. In particular, improving consumer and business confidence, growth of government expenditure, increasing loans, and a hike in the export of goods, tourism, and money transfers were the main drivers of economic growth in Q2 2017.