February is usually a good time to take stock of the country’s economic performance because at the beginning of the month statistical agencies release data on many baseline indicators for the previous year. Preliminary data reveals that the annual GDP growth rate in 2014 was 4.7%, which fell short of the 5% that had been expected.

According to Geostat’s rapid growth estimates, Georgia’s real GDP declined by 0.5% in November 2014 (Chart 1). Despite this, growth in the first eleven months of 2014 was a robust 5%, which is certainly a much better result than most countries in the region could boast. The ISET fourth-quarter GDP forecast predicts 3.9% growth in the last three months of 2014.

In October 2014, Georgia’s GDP growth slowed to 3.5% from 4.1% the month before. This slowdown is consistent with ISET-PI’s GDP forecast, according to which the economy is expected to increase by only 3.6% in the fourth quarter. Annual growth, however, is likely to be closer to the 5% mark. Given the sluggish growth dynamics of the global economy in 2014, this is a strong result for Georgia.

The Georgian economy’s growth rate appeared to slow down in September. According to Gaostat’s rapid estimates forecast, the real growth of GDP decreased to 4.1%. This estimate is the lowest this year since April when the growth rate fell to 2.7%. The ISET Leading Economic Indicators index warned about a possible slowdown of the economy in the third quarter, citing, in particular, the significant decline in exports that began in August 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.