Page 12 - GEORptSep19

3.0 Macro Economy
Georgia - Main Macro 2013 2014 2015 2016 Indicators
2017 2018
Q1 Q2 2019 2019
GDP real growth (y/y, %)
3.4 4.6 2.9 2.8 4.8 4.7 4.9 4.9
GDP (per capita, $) 3,599.6 3,676.2 3,766.6 3,864.6 4,078.5 4,415 981.0
GDP: Final consumption expenditure, (GEL mn)
23,671.8 25,570.7 27,318.7 28,241.5 30,630.6 32,652.8 8,200.6
GDP: Gross capital formation, (GEL mn)
6,652.9 8,688.8 10,004.3 11,136.5 12,264.8 13,675.7 2,693.8
GDP: Exports, (GEL mn)
11,997.9 12,518.3 14,206.8 14,837.8 19,023.7 22,622.8 5,244.8
GDP: Imports, (GEL mn)
15,475.2 17,627.3 19,774.3 20,187.5 23,559.0 27,385.8 6,394.0
Source: bne IntelliNews, CEIC
3.1 Macroeconomic overview
Georgia’s GDP growth accelerates to 6.1% y/y in July
Georgia’s economy accelerated to a growth rate of 6.1% y/y in July from 4.9% in Q1 and Q2, marking the sharpest advance this year, according to estimated data released by statistics office Geostat on August 30.
The figure put the average GDP growth in the year to date (end of July) at 5.1% y/y.
In the latest independent projection, Fitch forecast that Georgia’s economic growth would decelerate to 4.3% in 2019, from 4.7% in 2018, with credit growth slowing and the Russian flight ban hindering expansion of the tourism sector. Nonetheless, the growth would remain above the forecast current BB rating median of 3.3%. Acceleration of infrastructure spending and slightly looser fiscal policy would support a pick-up in growth to an average 4.7% in 2020-2021, Fitch anticipates.
Growth in July was driven by construction, manufacturing, trade, real estate, rental and business activities.
The impact of the weaker inflow of Russian tourists following the latest row between Moscow and Tbilisi was not particularly visible in July, as revealed by tourism data previously released. Georgia hosted 1,099,474 international visitors (+5.8% y/y) and 570,482 tourists (+1% y/y) in July, according to the Georgian National Tourism Administration (GNTA). The number of Russian tourists dropped by only 6.4% y/y. Russia counts as the largest origin-country for foreign tourists who travel to Georgia. The moderate decline in the number of Russian tourists offset the rising number of foreign tourists from other countries.
Georgia's exports performed particularly well in July, helped by the local currency's slight weakening over the past several months. Further exchange rate corrections in August should provide stability to exports. Georgia's exports rose by 17.4% y/y to $323mn in July, while imports, although contracting by
12 GEORGIA Country Report September 2019 www.intellinews.com