Page 12 - GEORptMay18

Georgia’s GDP growth accelerates to 5% in 2017
European Parliament approves €45mn in macroeconomic support for Georgia
The Georgian economy grew by 5% y/y in real terms and by 11.8% y/y in nominal terms in 2017, up from 4.2% y/y in 2016, according to national statistics agency Geostat.
In 2015-2016, Georgia suffered as a result of a weak economic backdrop in Central Asia, Russia and Turkey, with growth averaging 2.8%. Economic growth was spurred in 2017 by higher domestic and foreign trade, a flurry of infrastructure and construction projects and higher consumption.
Growth accelerated to 5.4% y/y in the fourth quarter, up from 4.4% y/y in the first nine months of the year, and was driven primarily by construction (13.2% y/y increase in output), wholesale and retail trade (7.2%) and industry (4.5%).
Overall, the sectors that grew the most in 2017 were construction (11.2% y/y growth), hospitality (11.2%), financial intermediation (9.2%), transport (7.2%), wholesale and retail trade (6.6%), real estate (6.3%) and manufacturing (5%). Meanwhile, agriculture experienced a 2.7% y/y contraction.
Georgia's GDP is not concentrated in any sector in particular, though the largest contributors are trade (17.6%), industry (16.4%), transport (10.2%), construction (9.3%), agriculture (8.2%) and real estate (6.9%).
The European Parliament on March 15 endorsed a proposal by the European Commission to provide €45mn in macroeconomic assistance to Georgia as part of its assistance for the period 2017-2020. The support comprises of €35mn in medium-term loans and €10mn in grants.
In a statement, the office of the Eastern Partnership and Russia Unit at the European Parliament noted that Georgia's macroeconomic outlook remains worrisome, despite recent improvements. Thus, the country's debt-to-GDP ratio is on the rise due to the sharp depreciation of the local currency, the balance of payments remains fragile due to the high current account deficits that the import-dependent country runs, and the external environment remains weak.
In the same statement, the European Parliament praised the supervisory activities of the Georgian central bank, which, it says, "have warranted that the financial system remains sound and well capitalised overall".
12 GEORGIA Country Report May 2018 www.intellinews.com