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3.0 Macro Economy
Georgia - Main Macro 2014 2015 2016 2017 2018 1Q2019 2Q2019 3Q2019 Indicators
GDP real growth (y/y, %)
4.6 2.9 2.8 4.8 4.7 5.0 4.6 5.8
GDP (per capita, $) 4,738.8 4,012.6 4,062.1 4,358.5 4,722.0 1,026.7 1,179.0 1,237.0
GDP: Final consumption expenditure, (GEL mn)
25,570.7 27,318.7 28,241.5 30,630.6 32,652.8 8,200.6 8,313.3
GDP: Gross capital formation, (GEL mn)
8,688.8 10,004.3 11,136.5 12,264.8 13,675.7 2,693.8 3,539.9
GDP: Exports, (GEL mn)
12,518.3 14,206.8 14,837.8 19,023.7 22,622.8 5,244.8 6,638.5
GDP: Imports, (GEL mn)
17,627.3 19,774.3 20,187.5 23,559.0 27,385.8 6,394.0 7,465.5
Source: bne IntelliNews, CEIC
3.1 Macroeconomic overview
Georgia’s economy clocks 5.2% y/y expansion in 2019 with mild slowdown expected this year
Georgia’s economy expanded by 5.2% in 2019, according to preliminary data released by national statistics office Geostat.
Growth thus accelerated from the 4.8% seen in each of the previous two years. The major international financial institutions, meanwhile, expect a robust advance this year, although a certain slowdown is likely to occur. That is expected to happen partly in response to monetary tightening pursued since last autumn by the central bank.
Geostat chief Gogita Todradze said at a press briefing that in December 2019, compared to the same month the previous year, growth was seen in the processing industry, transport, trade and hotel and restaurant sectors. Yet there was a downwards trend in the construction sector.
Fiscal stimulus played an important role last year and is likely to remain a clear factor in 2020 in the context of the run-up to the general election to be held this autumn.
GDP growth eased to 3.8% y/y in December, according to the statistics office’s rapid estimate. The figure seems to illustrate a scenario evidencing an economic slowdown driven by monetary tightening, although the lagged effects of the higher refinancing rates are unlikely to be visible as yet. In fact, the average growth rate measured across Q4 was 5.3%, slower than Q3’s 5.8% y/y but above the growth rates seen in each of the first two quarters of last year. The lagged impact of the monetary tightening is likely to surface no sooner than toward the end of the first quarter of 2020, assuming a six-month lag.
Major investment bank in Georgia, Galt & Taggart (G&T), expects the country to see growth of 4.7% in 2020 amid “fiscal acceleration during elections”, Lasha Kavtaradze, head of its macroeconomics analysis and forecasting told Businiss Media in an interview on January 19. The World Bank remains on the
12 GEORGIA Country Report February 2020 www.intellinews.com
