Geostat updated its preliminary estimate of real GDP growth for the third quarter of 2018. The Q3 estimate was revised downward to 3.7% (0.3 percentage points lower than the previous estimate). The real GDP growth rate reached only 2.2% year-on-year for November 2018. Consequently, the estimated real GDP for the first eleven months of 2018 was revised downward to 4.7%.

According to NBG, the volume of total remittances to Georgia amounted to 1,379 million USD in 2017, a 19.8% YoY increase. The recovery of remittances is a clear sign that the economies of Georgia’s partner countries continue to improve. All top source countries of money inflows to Georgia showed a notable increase: Russia (+15.4% YoY), Italy (+17.9% YoY), the United States (+11.2% YoY), and Greece (+13.4% YoY).

Recently, Geostat published the preliminary estimate of real GDP growth for the second quarter of 2017, which now stands at 4.7%. This is 0.7 percentage points above the previously estimated average growth rate for Q2. As a result, the real GDP growth for the first half of 2017 reached 4.9%.

According to the preliminary statistics released by GeoStat, Georgia’s GDP in Q1 of 2017 grew by 5.0% YoY – the highest growth rate since Q3 2014. What lies behind such spectacular growth numbers? First and foremost, it stems from the genuine improvement in the economic situation in the region, which has resulted in increased exports, FDI, tourism, and remittances. Secondly, the sharp increase in the growth rate in December 2016 “lifted” the GDP base and allowed normal GDP improvements to look even better compared to last year’s levels.

Both Georgia and Armenia have been subject to negative external economic shocks, particularly through remittances and exports, in 2014 and 2015, yet the macroeconomic adjustment of the countries appears to have been different. While the GDP growth of both countries remained relatively stable at around 3% in both years, the exchange rate of the Georgian Lari (GEL) depreciated by a 29% in 2014-2015 compared to 15% for the Armenian Dram (AMD).