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Economic Monitor Georgia

Georgia grew very strongly in 2021. The main drivers of growth were consumption and the partial recovery in tourism. The trend is expected to continue in 2022.

  • Georgia
WA 15 | February 2022
Macroeconomic Analyses and Forecasting

Overview

  • Very strong GDP growth of 10.6% in 2021, thus exceeding pre-crisis level
  • Positive GDP outlook for 2022 (5.5%)
  • Current account deficit down to 8.6% of GDP in 2021, driven by remittances and tourism
  • Remittances increased very strongly (24.6% yoy), supporting consumption
  • Partial recovery in tourism revenues: in 2021 at 38% of 2019 level; 2022: 75% expected
  • Lari appreciated by 6% vs. US dollar in 2021, Feb-22: below 3.00 GEL/USD
  • Very high inflation (13.9% yoy at year-end 2021), mainly due to higher commodity prices
  • NBG raised policy rate to 10.5% (+2.5 pp in 2021) to prevent rise in inflation expectations
  • Fiscal deficit reduced to 6.8% of GDP in 2021, debt ratio fell to 50% of GDP
  • Further deficit reduction forecast for 2022 (4.4% of GDP)

Topics

  • Electricity. Demand-supply gap and role of low prices
  • Cryptomining. Development 2018-2021 and implications for electricity sector
  • Russia-Ukraine conflict. Effects on Georgia and regional effects

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