Georgia’s real GDP growth constituted a strong 5.5% year over year (YoY) in the second quarter (Q2) of 2018, according to the Geostat figures. Recently this year, IMF and World Bank upped their forecast of economic growth for Georgia from 4.2% to 4.5%. In August, the National Bank of Georgia (NBG) has also revised its forecast for 2018 from 4.8% to 5.5%. Meanwhile, ISET-PI expects annual growth in 2018 to be 6.3% YoY.
According to Geostat’s rapid estimates of GDP growth, Georgia’s economy continues expanding at a moderately high pace, reaching 5.2% in the first quarter of 2018. GDP growth was mainly driven by an enhanced external environment, improved business confidence, credit expansion, and fiscal stimulus. Geostat’s Q1 growth figure is higher than the National Bank of Georgia’s (NBG) 4.8% projection for annual growth in 2018 but falls behind ISET PI’s annual GDP growth forecast of 5.7%.
Among the pleasant surprises early this year, were the figures for Georgia’s economic growth in 2017. According to GeoStat estimates, Georgia’s real GDP grew by 4.8% year over year (YoY) in 2017. This result moderately surpassed the ADB, EBRD, IMF, and World Bank’s last growth projections of 4.2%, 3.9% 4.0%, and 3.5% growth, respectively. NBG's 4.5% growth projection also slightly underestimated Georgia’s economic growth in 2017. The real winner in this race was ISET-PI’s annual GDP growth forecast.
Georgia’s real GDP growth rate in Q3 reached 4.4% year-on-year, putting the country on the path to achieving 4.7% annual growth in 2017. Export, tourism and money transfer trends were behind the strong showing in Quarter 3. Supply side pressures will keep inflation above the 4% target in 2017.
According to the preliminary statistics released by GeoStat, Georgia’s real GDP growth was 4% year over year (YoY) in Q2 2017, which fell short of the 5.8% that had been expected by the ISET-PI GDP forecast made in July. This shortfall was driven not by weak performance, but overly optimistic predictions of ISET-PI’s empirical model, influenced by high actual growth in the first quarter (5.1% YoY).