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Economic Monitor Georgia

  • Georgia
WA 19 | 2024
Macroeconomic Analyses and Forecasting
Overview
  • 2023: real GDP grew by 7.5%, third year of very high growth
  • 2024: real growth estimated at 5.7%. Return towards usual trend growth as effects of relocation of Russian people, external inflows and trade normalise
  • Major driver of growth in 2023/2024: public investments, these also boost the construction
    sector; growth additionally supported by consumption
  • Slowdown in lari appreciation in 2023. However: lari still remains appreciated by 40% in real
    terms relative to end-2020
  • Result: easier to import (investment) goods, but also drag on competitiveness
  • Inflation very low (0-1.5%) recently as commodity prices decrease and lari remains strong
  • Goods trade normalises but motor car imports and re-exports remain key factor
  • Public deficit and debt stabilised due to strong growth and lari appreciation
Special issues
  • Black Sea Submarine Cable. Economic viability unclear, strategic benefits
  • ACAA. Potential step to increase exports to EU
  • EU sanctions on RUS. No evidence for sanction circumvention in GEO

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