ISET-PI has updated its real GDP growth forecast for the third and fourth quarters of 2022. Here are the highlights of this month’s release:

Recently, Geostat released the preliminary estimate of real GDP growth for the second quarter of 2022, which now stands at 7.1%.

The real GDP growth rate reached 9.7% year-on-year in July 2022. Consequently, the estimated real GDP for the first seven months of 2022 amounted to 10.3%.

ISET-PI’s forecast of real GDP growth for the third quarter of 2022 stands at 16.5%. The second estimate for the fourth quarter growth forecast stands at 17.3%.

Based on July’s data, we expect annual growth in 2022 to be 13.8%. This number is most likely overestimated by the model at the current point in time. Due to war, sanctions, and migration that had not had relevant analogues in the Georgian data.

In addition, the National Bank of Georgia revised its expectation for real GDP growth from 4.5% to 9% in 2022. According to the Monetary Policy Report, among the reasons behind the prediction’s upward revision are the high credit activity, and improved external sector due to increased migration to Georgia amid the ongoing war in Ukraine. However, deteriorated investment sentiment and high inflation remain the main risk related to the GDP forecast.