After last year’s economic slowdown, Georgia is returning to growth. The economy is expected to grow by 3.5% this year, mainly driven by consumer spending. The lari has stabilised at around 3.30 GEL/USD after high volatility and a 14% depreciation against the US dollar last year. The National Bank (NBG) continues to intervene in the foreign exchange market and has raised the key interest rate to 9.5% to prevent rising inflation expectations. The budget deficit shrinks only slightly to 7.4% of GDP, also due to the continuation of stimulus programmes. The IMF programme was recently completed, a follow-up programme is still under discussion. The successful placement of a Eurobond (USD 500 million) is evidence of investor confidence. The current account deficit (10.9% of GDP) is driven by weak tourism. As the crisis subsides, a normalisation is expected with economic growth of 5.8% in 2022.