February 2023 | Inflation in Georgia subsides as global oil and food prices decline, but internal price pressures, driven by migration, remain

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28 February 2023

ISET-PI has updated its real GDP growth forecast for the first and second quarters of 2023. Here are the highlights of this month’s release:

According to Geostat's report titled “Tendency of Economic Growth, Indicators of Monthly Economic Statistics”, the real GDP growth in the fourth quarter of 2022 is estimated to be 9.5%, which has contributed to an overall annual real GDP growth of 10.1% in 2022.

As a result of the update, the growth forecast for Q1 of 2023 was revised downward to 2.7% from 3.9% in January. ISET PI’s first forecast for Q2 of 2023 puts GDP growth at 1.6%.

Based on December data, the annual growth in 2023 is expected to be 2% in the worst-case scenario, and 3% in the best-case or average long-term growth scenario. Our middle-of-the-road scenario (based on the average growth in the last four quarters) predicts a 2.4% increase in real GDP.

These numbers are most likely underestimated by the model at the current point in time. This is due to the fact that ongoing large-scale in-migration had not had relevant analogues in the Georgian data in the past.

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