Georgia Economic Outlook
Economic activity growth cooled to 5.5% year on year in Q3 from 7.4% in Q2. Rising output in the construction, financial and trade industries drove the overall expansion in Q3. In addition, tourism activity saw an almost 20% increase year on year, while multi-year low price pressures and lower interest rates should have supported private spending. However, activity contracted for most of the quarter in the manufacturing, transportation, real estate and communication sectors. Turning to Q4, our Consensus forecasts slowing growth, though available data is limited. In October, annual increase in exports outpaced imports growth—which dropped to a 32-month low—while inflation stayed downbeat. On 8 November, the European Commission formally recommended EU candidacy be granted to Georgia; the structural reforms required to join the EU are expected to promote growth and economic stability.
Georgia Inflation
Inflation ticked up to 0.8% in October from 0.7% in September. Rising price pressures for transport, health, and alcoholic beverages and tobacco drove the increase. Additionally, prices for housing and utilities, and miscellaneous goods and services continued to rise notably. Inflation should average around the Central Bank’s 3.0% target next year on lower interest rates.
This chart displays Economic Growth (GDP, annual variation in %) for Georgia from 2013 to 2022.