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An IMF team led by Mercedes Vera Martin visited Tbilisi from April 30 to May 13 to discuss the fourth review under the EFF. The programme supports the government’s reform agenda aimed at reducing economic and financial vulnerabilities and generating higher and more inclusive growth.
“The reform programme remains on track, with most commitments for the completion of the fourth review met,” Martin concluded.
“Growth is projected at 4.6% in 2019, with inflation somewhat above the 3% target mostly reflecting increases in tobacco excises. Structural reforms and infrastructure investment are expected to gradually increase growth to 5.25% over the medium term. The current account deficit is expected to narrow gradually supported by an improving trade balance,” she added.
3.2 Macro outlook
World Bank cuts Georgia 2019 GDP growth outlook by 0.4pp to 4.6%
The World Bank has revised downward its outlook for Georgia's GDP growth in 2019 and 2020 by 0.4pp and 0.2pp, respectively, but the revised scenario still shows the country’s economy expanding by 4.6% this year and 4.8% next year, compared to last year’s 4.7%. Growth will further strengthen to 5% in 2021, if the forecasting proves correct.
The latest World Bank calculations are given in its twice-yearly Global Economic Prospects report released late on May 4.
Georgia is already outperforming its region for growth, but the differential is likely to narrow in coming years as peers catch up on the back of continued implementation of domestic reforms and infrastructure investment. Growth in the South Caucasus subregion is projected by the World Bank to strengthen to 4.2% by 2021, from 2.6% in 2018.
The World Bank also observed in its report: “Robust services sector activity continues to underpin growth in the South Caucasus, with an additional boost coming from manufacturing in Armenia.”
The European Bank for Reconstruction and Development (EBRD) stuck to its forecast of economic growth in Georgia of 4.5% in 2019 in its latest economic outlook released in May.
12 GEORGIA Country Report July 2019 www.intellinews.com