October 2016 Macro Review | Georgia’s economy was weaker than expected in September, but exports showed an annual increase for the first time since July 2014
10 November 2016

According to Geostat’s rapid estimates, real GDP grew by 1.5% in September 2016, while the growth rate for Q3 stood at 2.2% year over year (YoY). The estimated third-quarter growth was thus 1.3 percentage points lower than ISET-PI’s GDP forecast for the quarter. One should note that the data from September are likely to include a very high services component (revenues from the tourism sector). Therefore, the quarterly growth number is likely to be revised upward in the future as more data comes in.

Despite low economic performance in the third quarter, the NBG still predicted 3.5% year-over-year real GDP growth for 2016 in its Monetary Policy Report published on 2 November. According to the NBG’s forecast, fiscal stimuli and the normalization of monetary policy will be the main drivers of investment and consumption in 2016-2017, while negative net exports will continue to deter economic growth.

Based on new information, the ISET-PI forecast for Q4 has been downgraded from 4.1% to 2.9%. The estimated real GDP growth for the first nine months of 2016 was 2.6% YoY, while ISET-PI’s annual GDP forecast stood at 2.7%.