March 2015 Macro Review | Slowdown of growth continues in January: lari depreciation against the US dollar not enough to lift exports
17 March 2015

The economic slowdown of the closing months of 2014 continued in January 2015, with the growth of real GDP amounting to only 0.5%. ISET‐PI’s GDP forecast is not optimistic either, with GDP growth in the first quarter of 2015 expected to be 0.5% (see GDP Forecast). The 5% economic growth initially forecasted by the government of Georgia, the 5.5% predicted by the ADB and the 4.2% predicted by the EBRD in September 2014 each seem quite out of reach now. In early March, the IMF mission lowered its forecast to 2%.

Consumer sentiment, as measured by the Consumer Confidence Index (CCI), has been decreasing over recent months and the index dropped to a new historical minimum in February. Consumers seem to be concerned about inflation linked to the depreciation of the Georgian lari against the US dollar.