EBRD Revises Upwards Georgian Economy’s Growth Forecast
Monday, November 13The European Bank for Reconstruction and Development (EBRD) revised its 2017 economic growth forecast for Georgia and said the country’s economy in 2017-2018 will experience faster growth than previously expected, according to an official statement released by the bank.
The revised forecast says Georgia’s economy will grow by 4.5 percent in both 2017 and 2018. Compared to a previous forecast released in May. The upward trend represents a0.6 percent improvement for the current year and a 0.3 percent improvement for 2018.
"Georgia’s economy is accelerating on the back of strong export performance and a burgeoning tourism industry. In the first half of 2017, GDP growth accelerated to an estimated 4.5 percent year-on-year increase following two years of below-3 percent growth in 2015-2016,” the report said.
The Georgian lari appreciated by approximately 6.7 percent against the US dollar through mid-October 2017, supported by foreign exchange inflows from increased exports, tourism receipts, the tightening of monetary policy and remittances from Georgians living abroad, which increased by approximately 19.7 percent in the first nine months of 2017.
The EBRD stressed that inflation spiked 6.2 percent year-on-year in September from an average of 2.1 percent in 2016 and added that the fiscal deficit is planned at around 4.1 percent of GDP in 2017. This reflects relatively high infrastructure spending financed mostly by borrowing from international financial institutions on favorable terms.
"A recovery in consumption, investment in infrastructure and the strong performance of the hospitality sector are expected to contribute to (overall) growth,” the EBRD said.
The Georgian Economy Ministry welcomed the revision and stressed that according to the latest estimates by many international financial institutions, Georgia will enjoy one of the fastest economic booms among post-Soviet states in the years to come.