ISET-PI has updated its forecast of Georgia’s real GDP growth rate for the third and fourth quarters of 2019. Here are the highlights of this month’s release:

Recently, Geostat has released the preliminary estimate of real GDP growth for the second quarter of 2019, which now stands at 4.5%. This is only 0.3 percentage points below ISET-PI’s recent forecast.

ISET-PI’s forecast of real GDP growth for the third quarter of 2019 stands at 7.1% — 0.4 percentage points lower than last month’s prediction. The first estimate for the fourth quarter growth forecast stands at 5.5%.

Based on July’s data, we expect annual growth in 2019 to be 5.5%. Although the annual growth forecast equals the estimate of the previous report’s worst-case scenario, we still expect a downward correction of the annual GDP growth numbers towards the end of the year, since we have not fully taken into consideration impeded tourist inflows, deteriorated foreign direct investments and increased risk of negative external shocks. In addition, the National Bank of Georgia revised its expectation for real GDP growth down from 5% to 4.5% in 2019. According to the Monetary Policy Report, among the reasons behind the prediction’s downward revision is the rise of external sector risks.