Georgia Economic Outlook

June 7, 2022

The economy had a strong start to 2022, with economic activity rising by over 14% year on year in Q1. This reading was likely supported by the easing impact of the pandemic, surging tourist arrivals and buoyant credit growth. That said, the fallout from the war in Ukraine hit activity towards the end of the quarter and moving into Q2, as Georgia has close economic ties to both Russia and Ukraine. Economic activity slowed notably in April, with declines recorded in construction, manufacturing and trade, as well as in professional, scientific and technical activities. Moreover, a spike in commodity prices in the wake of the war kept inflation in double digits during April. This forced the Central Bank to keep interest rates elevated, which is likely to negatively affect consumer spending.

Georgia Economic Growth

Our panelists expect growth to moderate notably this year due to the war in Ukraine, which will likely impact exports, remittances and tourism. However, strong credit growth and the removal of Covid-19 restrictions will support domestic demand. An intensification of the war, further sanctions on Russia and domestic political instability are risks to the outlook. FocusEconomics panelists project GDP to expand 3.4% in 2022, which is up 0.4 percentage points from last month’s estimate, and to grow 5.6% in 2023.

Georgia Economy Data

	2015	2016	2017	2018	2019
Population (million)	3.7	3.7	3.7	3.7	3.7
GDP per capita (USD)	4,016	4,061	4,361	4,718	4,767
GDP per capita (EUR)	3,618	3,668	3,866	3,999	4,275
GDP (USD bn)	14.9	15.1	16.2	17.6	17.7
GDP (EUR bn)	13.5	13.7	14.4	14.9	15.9
Economic Growth (GDP, annual variation in %)	3.0	2.9	4.8	4.8	5.1
Fiscal Balance (% of GDP)	-1.2	-1.5	-0.5	-0.8	-1.8
Public Debt (% of GDP)	36.8	40.3	39.9	39.9	41.2
Money (annual variation of M2 in %)	-3.8	14.8	27.9	15.9	-
Inflation Rate (CPI, annual variation in %)	4.0	2.1	6.0	2.6	4.9
Policy Interest Rate (%)	8.00	6.50	7.25	7.00	9.00
Exchange Rate (vs USD)	2.40	2.66	2.59	2.68	2.86
Exchange Rate (vs USD, aop)	2.27	2.37	2.51	2.53	2.82
Exchange Rate (vs EUR)	2.61	2.81	3.10	3.06	3.21
Exchange Rate (vs EUR, aop)	2.52	2.62	2.83	2.99	3.15
Current Account (% of GDP)	-11.8	-12.5	-8.1	-6.8	-5.1
Current Account Balance (USD bn)	-1.8	-1.9	-1.3	-1.2	-0.9
Trade Balance (USD billion)	-4.0	-3.9	-3.8	-4.1	-3.7
Exports (USD billion)	3.0	2.9	3.6	4.4	4.9
Imports (USD billion)	7.0	6.7	7.4	8.5	8.7
Exports (annual variation in %)	-24.4	-5.2	24.6	23.4	12.2
Imports (annual variation in %)	-15.8	-3.2	9.4	15.5	1.9
International Reserves (USD)	2.5	2.8	3.0	3.3	3.5
External Debt (% of GDP)	102	105	107	101	105

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Georgia Facts

	Value	Change	Date
Exchange Rate	2.86	0.0 %	Jan 01
Stock Market	0.1	0.55 %	Jan 07

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Georgia Economic Outlook

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