Quarter 3 2021 Macro Review | Quarter 3 reality check for Georgia: low vaccination rates, higher inflation and tepid FDI emerge as new challenges
20 December 2021

The global economy continues to recover in Q3 2021 following the deep economic crisis caused by the COVID-19 pandemic. The growth accelerated as a result of the easing of virus- containment restrictions in most countries. According to the  IMF forecast (October 2021), global GDP will grow 5.9% year over year (y/y), which is a downward adjustment from the previous estimate of 6% (July 2021). The adjustment reflects a downward revision of growth projections for advanced economies and low-income developing economies. The respective drivers are supply disruptions and the slower than anticipated mass vaccination in developing economies. While the majority of the population (58%) in advanced economies is fully vaccinated, the rest of the world is lagging behind with only 36% of the population in emerging market economies and less than 5% of the population in low-income developing countries being fully vaccinated (for comparison, in Georgia about 28.9% of the population is fully vaccinated). These factors drove down the annual growth forecasts for the low-income developing economies by 0.6 percentage points (pp) compared to July estimates.

The expected growth rates for the United States and the Euro area are 6% and 5% respectively, while the Chinese economy is expected to grow by 8%. Furthermore, Russia is expected to grow by a moderate 4.7% y/y, while Turkey’s expected growth rate is projected to be 9% y/y.