Page 5 - GEORptFeb22

1.0 Executive summary
Georgia’s economy rose by 9.6% y/y in December 2021 and ended the full year with an outstanding double-digit growth rate of 10.6%, according to preliminary data issued by the statistics office Geostat.
The country’s economy thus fully reversed the 6.8% contraction seen in 2020 when it dropped to $15.8bn from $17.5bn-17.6bn in 2018-2019.
There was growth in manufacturing, transportation and storage, trade, hotels and restaurants, electricity, gas, steam and air conditioning supply, real estate activities, arts, entertainment and recreation sectors, while construction was in a declining state.
Under its latest projection issued in November, the European Bank for Reconstruction and Development (EBRD) said that Georgia’s economy would rise by 7.5% in 2021 and 5.5% in 2022. The government of Georgia revised in November its budget in line with a 10% expected growth (9.5% previously), assuming 6% GDP growth in 2022.
A total of 4,553 new businesses were registered in December 2021, which is a 21% increase compared to December 2020. VAT payers’ turnover amounted to GEL11.5bn ($3.7bn), a 31.2% increase y/y. Exports of goods in December totalled $4.2mn, increasing by 26.9%.
Georgian Finance Minister Lasha Khutsishvili said ‘by the end of 2022, the volume of our economy will approach GEL65bn, and GDP per capita will be more than $5,600" on 15 December 2021.
The World Bank’s January edition of Global Economic Prospects 2022 report says that the Georgian economy is projected to grow 5.5% in 2022 and 5% in 2023.
The hospitalisation rate for those infected with coronavirus in Georgia has decreased from 20% to 4.5%, Georgian Health Minister Zurab Azarashvili said on January 26.
Overall, 1,607 cases of the Omicron variant have been confirmed in the country as of January 26.
Georgia instituted a COVID-19 ‘green pass’ system in order to visit stores and restaurants on December 1.
Georgia’s inflation peaked at 13.9% y/y in December after it has hovered between 12% y/y and 13% y/y since August. The food prices, 15.6% higher than a year earlier, remain the main inflationary driver. Georgia’s producer price index (PPI) for industrial products was up by 3.8% m/m and 20.3% y/y in December 2021, according to Geostat.
The Monetary Policy Committee of the National Bank of Georgia (NBG) on December 8 increased its key refinancing rate by 0.5pp to 10.5%, in the fourth rate hike in 2021. Loose fiscal policy, imported inflation and aggregate demand have all contributed to the persistent double-digit inflation. NBG stressed that it is keeping the monetary policy stance tight, as increased inflation remains a challenge for Georgia.
5 GEORGIA Country Report February 2022 www.intellinews.com