April 2015 Macro Review | Higher than expected growth in February raises hopes for recovery
16 April 2015

According to Geostat’s rapid estimates, real GDP increased by 4.9% in February. This comes as welcome news after several consecutive months of low and, at times (November 2014), negative growth. ISET’s GDP forecast predicts 0.5% GDP growth in the first quarter of 2015. However, this is likely an underestimation of the true outcome, as the economy has already partially adjusted to the external shocks that were the main drivers of the slowdown. During the reporting month, VAT payers’ turnover, which is the basis for rapid GDP estimates, increased by 13% in annual terms.

The growth of the economy has not yet been reflected in consumers’ perceptions. In February, the Consumer Confidence Index (CCI) decreased significantly, mainly because of lari depreciation and high inflation expectations. The CCI continued its downward trend in March, but the decline was minor compared to the magnitude of the fall reported in February. Moreover, consumers’ expectations improved for the first time in four months.