Page 12 - bne IntelliNews Georgia country report October 2017

3.1 Macroeconomic overview
Mixed performance for South Caucasus in WEF’s 2017 competitiveness ranking
Georgia’s GDP growth tapers off at 3.8% y/y in July
The three countries of the South Caucasus have recorded mixed results in the 2017/2018 iteration of the World Economic Forum's Global Competitiveness Index released on September 27. Thus, while Azerbaijan and Armenia climbed two and six places in the ranking to 35th and 73rd out of 137 countries, respectively, Georgia stagnated in its performance. It lost eight positions to place 67th.
Common problems amongst all three countries were the fact that they lagged in financial market development and also technological innovation, healthcare and education and infrastructure, particularly in the dissemination of mobile communications. However, all three ranked among the top 10 countries in the ranking for the reduced number of administrative procedures and time needed to open a new business.
Georgia excelled in certain aspects of its macroeconomic environment, such as inflation, for which it ranked as the best country in the study. Meanwhile, both Azerbaijan and Armenia ranked poorly in the area of macroeconomic environment - Azerbaijan because of the deterioration in its economy since the drop in oil and gas prices in 2014, and Armenia because of its unbalanced government budget and lack of national savings.
The annual ranking looks at 12 sets of metrics to determine the institutions, policies and factors that contribute to high levels of economic productivity in the countries under study. The majority of the countries topping the ranking are in the Organisation for Economic Cooperation and Development (OECD) - Switzerland, the US, Singapore, the Netherlands and Germany, for instance.
Georgia's economic growth continued to slow in July, when GDP expanded by 3.8% y/y, national statistics agency Geostat reported on August 30. In June, economic growth stood at 4.6% while in May it was 5.3%.
The small and trade-reliant Georgian economy in the South Caucasus has seen a slowdown in economic growth in recent years, following similar trends 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 over 4% in 2017 according to the government's projections. In the first seven months of the year, GDP has expanded by 4.4% y/y.
Meanwhile, consumer price inflation stood at 6% in July, Geostat said in the same report, showing a softening compared to the 7.1% y/y inflation registered in June.
The increase in producer prices for industrial goods, at 10.7% y/y, was marginally lower compared to the 12.3% y/y registered in June.
12 GEORGIA Country Report October 2017 www.intellinews.com