October 2014 Macro Review | Concern about the economy, as export growth turns negative in August
14 October 2014

According to preliminary estimates, Georgian economic growth declined from 7.2% to 5.2% between July and August 2014. Although the August estimate is still quite high, there is increasing concern that the national economy is set to slow down in the second half of the year.

On the downside, the ISET-PI Leading Economic Indicators have revised the growth forecast for the third quarter of 2014 downward from 3.7% to 2.2%, and yearly growth to 3.8%. This implies a possibility of a significant economic slowdown in the last four months of 2014.

Secondly, the Consumer Confidence Index, and especially its Present Situation component, has had a declining trajectory since June (see Chart 2.). Although the index increased in Tbilisi from July to August, this was offset by the decline in the rest of Georgia, which was mainly a result of the drought and expected bad harvest.