Page 15 - GEORptMay21

IMF cuts 2021 forecast for Georgia’s economy to 3.5%
“As a tourism-dependent economy, the gradual lifting of pandemic-related restrictions should revive the country’s growth this year and accelerate it in 2022,” said ADB country director for Georgia Shane Rosenthal. “While the vaccine rollout will be key to a fast recovery, increasing access to finance for small and medium-sized enterprises, expanding e-commerce, and transforming agriculture to boost food exports will be vital to Georgia’s long-term economic growth and the livelihoods of Georgians.”
The ADB projected that inflation would slow to 5.0% in 2021 and 3.5% in 2022, although this would be above the National Bank of Georgia’s inflation target of 3.0%. The current account deficit is expected to narrow to 10% of GDP in 2021 and 7% in 2022 as the merchandise trade balance and tourism gradually improve.
The International Monetary Fund (IMF) has cut its economic growth forecast for Georgia. It now expects only a 3.5% expansion this year to follow the steep 6.1% contraction recorded in 2020, according to its latest World Economic Outlook (WEO) report released on April 6.
In its forecasting released last October, the Fund anticipated growth of 4.3%. The latest forecast from the Georgian government sticks with 4.3%.
Also according to the IMF's updated WEO, a more robust 5.8% of economic growth is expected in Georgia in 2022, with 5.5% seen in 2023. The government has similar growth forecasts for 2022 and 2023.
The Fund said it expected that Georgia’s current account deficit would slightly moderate to 11.5% of GDP this year from 12.3% in 2020, but this figure would still be double the pre-crisis level. The current account deficit would return to near the pre-crisis level in the medium-term, hitting 5.6% in 2026, it added. Inflation in Georgia was set to moderate to 3.8% this year, down from 5.8% in 2020, the IMF anticipated. The country was singled out as among those with the steepest rise in food prices (+3.0%) at the end of 2020, with the consequent negative impact on food security.
15 GEORGIA Country Report May 2021 www.intellinews.com