Georgia Economic Outlook

October 5, 2021

The economy grew 29.9% year-on-year in the second quarter (Q1 2021: -4.5% yoy), marking the strongest result since our current records started in 2011. The upturn was broad-based, with the key manufacturing, and retail and wholesale trade sectors spearheading the expansion. That said, the reading was flattered by a significant base effect after GDP fell at a record pace in Q2 2020. Turning to Q3, the recovery seemingly lost momentum amid the reintroduction of some lockdown measures, which brought economic activity growth down to single digits in July–August. More positively, a quickening vaccine rollout and subsiding new Covid-19 cases bode well for the economy going into the final quarter of the year. Meanwhile, on 20 September, Moody’s affirmed Georgia's Ba2 credit rating and kept the outlook stable, citing an effective macroeconomic policy response to the pandemic-induced downturn.

Georgia Economic Growth

The economy is set to recover this year as the release of pent-up demand props up domestic activity, while the external sector benefits from recovering foreign demand. In 2022, GDP growth should ease slightly but remain well above the regional average. That said, new Covid-19 variants and regional geopolitical uncertainty remain key risks to next year’s outlook. FocusEconomics panelists project GDP to expand 7.8% in 2021. In 2022 growth is seen moderating to 6.0%, which is unchanged from last month’s forecast.

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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