Georgia Economic Outlook

June 4, 2019

Economic growth accelerated in Q1 as Russia’s surging appetite for Georgian commodity exports boosted the external sector. Domestic demand metrics, however, were less upbeat in Q1: A rise in unemployment and a jump in inflation, which more than doubled from the previous quarter, likely curbed real income growth and weighed on consumer spending. Turning to Q2, growth appears to have remained vigorous. Economic activity growth came in above Q1’s average in April, largely thanks to impressive merchandise exports growth. Meanwhile, on 13 May, IMF staff approved a further USD 41.6 million of additional financing. Subject to approval by the executive board, this will bring total disbursements under the program to around USD 207.9 million.

Georgia Economic Growth

Growth is seen broadly stable this year despite the volatile external setting and decelerating private sector credit growth. The accommodative monetary policy environment, gradually improving labor market and healthy investment activity, bolstered by higher infrastructure spending, should all drive consumer demand. FocusEconomics panelists expect GDP to grow 4.6% in 2019, which is unchanged from last month’s forecast, and 4.6% again in 2020.

Georgia Economy Data

	2013	2014	2015	2016	2017
Population (million)	3.8	3.7	3.7	3.7	3.7
GDP per capita (USD)	4,298	4,429	3,802	3,946	4,284
GDP per capita (EUR)	3,307	3,235	3,413	3,552	3,756
GDP (USD bn)	16.3	16.5	14.1	14.6	15.8
GDP (EUR bn)	12.5	12.1	12.7	13.1	13.9
Economic Growth (GDP, annual variation in %)	3.4	4.6	2.9	2.8	4.8
Fiscal Balance (% of GDP)	-1.1	-2.0	-1.1	-1.4	-0.9
Public Debt (% of GDP)	34.7	35.6	41.4	44.6	44.9
Money (annual variation of M2 in %)	33.2	9.1	-2.5	12.9	29.4
Inflation Rate (CPI, annual variation in %)	-0.5	3.1	4.0	2.1	6.0
Policy Interest Rate (%)	3.75	4.00	8.00	6.50	7.25
Exchange Rate (vs USD)	1.74	1.88	2.40	2.66	2.59
Exchange Rate (vs USD, aop)	1.66	1.76	2.27	2.37	2.51
Exchange Rate (vs EUR)	2.39	2.28	2.61	2.81	3.10
Exchange Rate (vs EUR, aop)	2.21	2.34	2.52	2.62	2.83
Current Account (% of GDP)	-6.3	-11.3	-12.7	-13.2	-9.0
Current Account Balance (USD bn)	-1.0	-1.9	-1.8	-1.9	-1.4
Trade Balance (USD billion)	-5.1	-5.7	-5.5	-7.7	-5.3
Exports (USD billion)	2.9	2.9	2.2	2.1	2.7
Imports (USD billion)	8.0	8.6	7.7	9.9	8.0
Exports (annual variation in %)	22.5	-1.7	-22.9	-4.1	29.0
Imports (annual variation in %)	-0.4	7.2	-10.1	27.5	-19.0
International Reserves (USD)	2.6	2.5	2.3	2.6	2.8
External Debt (% of GDP)	82.6	84.7	108	109	109

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Georgia Facts

	Value	Change	Date
Exchange Rate	2.74	0.0 %	Jun 13
Stock Market	0.5	0.55 %	Jun 13

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