Page 5 - GEORptNov21

1.0 Executive summary
Georgia's economy expanded 12.0% year-on-year in the first eight months of 2021, compared with a 5.6% drop in the year-earlier period, preliminary government data showed on September 30. The gain came as the ex-Soviet republic recovered from the pandemic's fallout.
The country’s estimated real GDP growth rate in Q2 amounted to 29.9% y/y to total GEL 15.91bn, according to the national statistics office Geostat. Q2 2021 saw growth, year on year, in almost all sectors. Significant contributions were observed in wholesale and retail trade; manufacturing; arts, entertainment and recreation; transport and logistics; construction; accommodation and meals; and financial and insurance activities. The Georgian economy shrunk by 6.2% in 2020.
The government of Georgia has revised upward its forecast for this year’s economic growth from 7.7% to 9.5%, while it expects 6% growth next year, according to the 2022 budget planning quoted by BusinessPressNews.ge.
Global ratings agency Moody's Investors Service expects the Georgian economy to grow by 7.3% in 2021, following a 6.2% contraction in 2020, underpinned by fiscal policy support to consumption in 2021 and signs of steady rebound in regional tourism. Moody's expected growth to be at a potential 4-5% in the next few years, driven by increased investment in productivity-enhancing infrastructure in agriculture and manufacturing.
The International Monetary Fund (IMF) projects the Georgian economy to grow 7.7% in 2021 and 5.8% in 2022, reads the latest WEO report, titled World Economic Outlook: Recovery During a Pandemic.
With these indicators, Georgia will have one of the highest economic growth rates in the region of the Middle East and Central Asia.
The Fund expects the economic rebound to help the government bring public debt down from over 60% of GDP to 55.3% of GDP at the end of the year, compared to a slight deterioration (60.8% of GDP) envisaged under the previous forecast in April.
Robust growth in remittances and exports, and early signs of a faster than expected rebound in tourism have supported the recovery and should contribute to a narrowing of the current account deficit (to 9.9% of GDP) compared to its elevated 2020 level, according to the IMF.
The recovery in tourism strengthened in September 2021, with tourist arrivals (overnight stays) recovering to 39% of the September 2019 level, up from an average 33% recovery during June-August 2021. Notably, tourism revenues recovered faster than arrivals in September like in previous months, hitting 50.8% of September 2019 level.
Significant downside risks remain and contribute to an outlook that is more uncertain than usual, the Fund acknowledged, urging Georgia to increase its coronavirus vaccination rate.
5 GEORGIA Country Report November 2021 www.intellinews.com