Page 17 - Small Stans and Causcasus Outlook 2022

Georgia’s economy was set to grow by 7.5% in 2021, fully reversing the
6.2% contraction seen in 2020, the European Bank for Reconstruction
and Development (EBRD) estimated in November, revising upwards its
forecast by 3.0pp compared to its last projection in June. The actual
performance may have been slightly stronger, judging from
January-November data. The government hopes for 10% growth in
2021 and 6% in 2022.

For 2022, the EBRD projects a robust 5.5% growth as well. This would
be a stronger advance compared to the pre-crisis average growth
demonstrated by Georgia’s economy. The actual advance in 2022 will
critically depend on the resumption of tourism activity globally and in the
country.

The country’ GDP increased by 10.7% y/y in January-November,
reversing the 5.9% contraction reported in the same period of the
previous year, according to flash estimates of the statistics office
Geostat.

In the third quarter of 2021, for which detailed data is available,
Georgia’s GDP marked a small (+0.8%) advance compared to the
same quarter of 2019. The two-year growth rate (used in order to filter
out the base effects) was 13.6% in Q2 and 1.0% in Q1. As of Q3, the
sectors of IT&C and financial services boasted robust growth rates
compared to 2019, while the HoReCa sector lagged by 29% compared
to the same quarter of 2019. Manufacturing posted a marginal 0.7%
contraction in Q3 (compared to Q3, 2019), but it posted robust growth
in the previous quarters.

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