Page 14 - GEORptNov18

Estimated real GDP average growth amounted to 4.9% y/y for the first nine months of 2018.
Full-year projections set by international financial institutions and independent think-tanks at 5.5% or above now seem on the optimistic side. It is still premature to conclude that there will be prolonged slowdown, but the economic challenges faced by the ruling Georgian Dream coalition in the coming two years until the October 2020 general election are by now visible.
Voters’ frustration with their low standard of living surfaced in the October 28 first round of the presidential elections when the Georgian Dream endorsed candidate received less votes than the votes of all the other candidates put together and just edged ahead of the second-placed opposition candidate who some analysts think will win the runoff due before December 2.
The International Monetary Fund in its latest World Economic Outlook issue, released on October 9, revised its forecast for Georgia’s 2018 GDP growth to 5.5% from the 4.5% it projected in April. Independent projections put the country’s expected growth this year at above 6%, but caution is shown when it comes to possible strengthening adverse effects stemming from the Turkish lira crisis.
Looking at expected growth in Georgia in 2019, the Fund maintained its forecast at 4.8%. Similarly, its projection for the 2023 GDP growth rate - which reflects the Fund’s estimate of the country’s potential growth rate - was held at 5.2%.
The central bank has revised its expectation for real GDP growth from 4.8% to 5.5% in 2018. According to its monetary policy report, among the reasons behind the upward revision are improved domestic and external demand due to significant foreign capital inflows - mainly from exports, tourism and remittances - and improved business sentiment, credit growth and capital spending by the government.
14 GEORGIA Country Report November 2018 www.intellinews.com