Page 5 - GEORptJul22

1.0 Executive summary
Georgia’s economy expanded by 2.6% y/y in April, according to the national statistics office Geostat. GDP growth was observed in transportation and storage, hotels and restaurants, electricity, gas, steam and air conditioning supply, financial and insurance activities, arts, entertainment and recreation and mining and quarrying. Declines were seen in construction, manufacturing, professional services, scientific and technical activities and trade.
Geostat also stated that 6,894 new businesses were registered in April, up 41.4% y/y, while exports of goods in January-April were valued at $1.5bn, up 32.8% y/y.
Georgia's real GDP grew by 10.4% in 2021, according to Geostat on March 21. Last year, GDP at current prices amounted to GEL60.2bn ($18.7bn), which is 22.3% higher than the corresponding figure for 2020.
The World Bank in its June issue of ‘Global Economic Prospects’ has revised its GDP growth forecast for Georgia for 2022 upwards from 2.5% to 5.5%. The Georgian economy has shown resilience to the economic shock induced by the Russian invasion of Ukraine so far, driven by the strength of the services sector, particularly in tourism, with a strong recovery in the year through May.
The International Monetary Fund (IMF) previously said that Georgia’s spillovers from the war and sanctions are expected to lower Georgia’s growth to around 3% in 2022, raise inflation, and widen the current account deficit. The outlook is subject to a higher-than-usual level of uncertainty. Georgia’s economy has proven resilient in the past, and with the support of policies under the authorities’ programme. IMF expects growth to pick up in 2023 and other key indicators to strengthen as well.
Georgian Prime Minister Irakli Garibashvili tried to put a brave face on Georgia's failure to secure EU candidate status from Brussels, saying that the country would work towards being given the status. Georgia was not granted candidate status at the European Council at the June 23-24 summit - while allowing Ukraine and Moldova to go forward - because of the country’s democratic deficits. The European Commission said Georgia must first fulfill a number of conditions only after which can it receive candidate status.
Irakli Garibashvili used his annual report to parliament on 22 June to lambast the opposition and to criticise the European Council for not granting the country candidate status. Garibashvili explained that "Moldova and Ukraine have an absolutely identical record in connection with the prospect" and claimed that it was because of the war that these two countries received candidature as 'prepayment'.
In trade related news, the Georgian government will ban the export of wheat and barley for a year starting from July 4, 2022. The reason is to ensure food security on the domestic market given the Russian invasion of Ukraine, according to Minister of Environment and Agriculture Otar Shamugia.
5 GEORGIA Country Report July 2022 www.intellinews.com