Page 15 - bne IntelliNews George country report Sept 2017

Georgia’s GDP growth to exceed 4% projection, says economy minister
slowdown in economic growth in recent years, following the similar trend experienced by its main trade partners – neighbours Turkey, Azerbaijan and, to a smaller extent, Armenia and Russia. However, following GDP growth of 2.9% in 2015 and 2.2% in 2016, the Georgian economy is expected to grow by 4% in 2017 according to the government's projections.
In the same report, Geostat noted that the consumer price index for June had grown by 7.1% y/y and that the producer price index for industrial goods was up by 12.3% y/y.
Meanwhile, despite a steady growth in exports, which were 30.8% higher compared to the first half of 2016, Georgia's foreign trade deficit surpassed $2.3bn, representing almost 50% of total foreign trade turnover.
Georgia's economy has a good chance of growing above the government's 4% projection this year thanks to government spending on infrastructure projects and private sector developments, Economy Minister Giorgi Gakharia told Reuters in an interview on June 28.
The small and trade-reliant economy in the South Caucasus has seen a slowdown in economic growth in recent years, following the similar trend experienced by its main trade partners - neighbours Turkey, Azerbaijan, and to a smaller extent, Armenia and Russia. However, following GDP growth of 2.9% in 2015 and 2.2% in 2016, the Georgian economy is expected to grow by 3.5% in 2017, according to projections by international financial institutions.
The government's projection is higher at 4%, but Gakharia says that even that forecast will be exceeded, seeing how GDP grew by 4.2% y/y in the first four months of the year.
"The private sector is developing well and the government's capital spending will increase," he said. Furthermore, foreign direct investment (FDI) is expected to pick up from $1.64bn in 2016.
Attracting FDI is one of Tbilisi's main priorities at the moment, the minister added, particularly since investments from oil major BP into a gas pipeline that crosses Georgia on its way from Azerbaijan to Europe are starting to wane as the project nears completion.
However, "unfavourable market conditions" have prompted Georgian authorities to postpone their earlier decision to sell stakes in state-owned Georgia Oil and Gas Corporation (GOGC) and Georgian Railways, Gakharia
15 GEORGIA Country Report September 2017 www.intellinews.com