Economic Monitor

Economic Monitor Issue 14 | June 2021


  • Moderate GDP recovery of 3.5% in 2021, after drop by 6.2% in 2020
  • Outlook for 2021 subdued due to lockdown in Q1-2021 and limited prospects for tourism
  • Current account deficit over 10% of GDP in 2020/2021, due to weak tourism revenues
  • Lari depreciated by 14% in 2020, but relatively stable around GEL/USD 3.30 in 2021
  • Inflation on the rise on back of Lari depreciation (pass-through) and higher commodity prices
  • Reaction by NBG: policy rate up by 1.5 pp in 2021; current rate: 9.5%
  • Remittances continue positive trend from second half of 2020; stabilising factor
  • Government continues to provide sizeable COVID-19 fiscal stimulus (2.3% of GDP in 2021)
  • Successful recent placement of USD 500 m Eurobond (5-year maturity, yield: 2.875%)
  • IMF programme successfully completed, new programme still in discussion

Economic Monitor Issue 13 | January 2021


  • Strong drop in GDP (-5.1%) in 2020
  • Before the crisis, GDP 2020 was forecast at 4.3%; economy hit hard by pandemic
  • Main drivers: lower exports of services and decline in investments
  • Key sector: tourism; drop in international visitors by 80%
  • Recovery of GDP by 4.3% forecast for 2021, lower rate than before the crisis
  • Lari depreciated by 13% in 2020 against backdrop of uncertainty and lower exports
  • NBG reacted by sizeable FX interventions; policy rate cut by 1 pp to 8%
  • Remittances increased by 8.8% yoy, much stronger than initially anticipated
  • Strong anticyclical response by the government to the crisis
  • Twin deficits: current account deficit at 9.8%, public deficit of 9.0% of GDP
  • Augmented IMF programme crucial for overcoming the crisis

Economic Monitor Issue 12 | June 2020


  • GDP to drop by 4.0% in 2020; pre-COVID forecast: +4.3%
  • Consumption to drop heavily, also due to much lower remittances (Apr: -42.3%)
  • Exports to contract by 24%; but effect exaggerated due to re-exports of cars and copper
  • Tourists revenues strongly affected; perspective for Jul/Aug still not clear
  • Current account deficit to reach 11.3% of GDP; pre-COVID forecast: 5.3%
  • Exchange rate at ca. 3.0 GEL/USD; sizeable depreciation in March followed by appreciation
  • NBG’s policy rate at 8.5%; limited room for reduction due to higher-than-target inflation risks
  • Government reacted to crisis with strong anticyclical fiscal measures
  • As a result, budget deficit will amount to 8.5% of GDP in 2020; pre-COVID plan: 2.4%
  • IMF programme augmented by USD 325 m, incl. USD 200 m for budget support

Economic Monitor Issue 11 | January 2020


  • Agro-food exports: The role of transport and logistics sector
  • DCFTA: Sectoral analysis reveals sizeable DCFTA effect on EU exports to Georgia
  • Banking sector: Georgian banking sector on a more stable footing
  • Capital markets: Georgian capital markets remain underdeveloped

Economic Monitor Issue 9 | January 2019


  • Presidential elections. New President has been elected
  • Banking. Measures to curb household debt
  • Turkey. So far only moderate effect of depreciation of Turkish Lira on Georgia
  • Pension reform. Start on 1 January 2019

Economic Monitor Issue 8 | June 2018


  • Mining of cryptocurrencies. Own estimation of contribution to GDP
  • Mid-term fiscal plan. Higher public investment combined with a lower budget deficit
  • Banking sector. Stability and concentration
  • De-dollarisation. Partial success in 2017

Economic Monitor Issue 7 | January 2018


  • Inventory write-offs. State should allow enterprises to write off actual losses; verification by plausibility checks founded on databases
  • Remittances. Increase by 20% in Jan-Sep 2017 supports private consumption
  • Doing Business Ranking. Improvement from rank 16 to rank 9
  • Capital market development in the context of the DCFTA. Possibility for larger enterprises to mobilise capital
  • Introduction of capital-funded pensions. Successful introduction of capital-based pensions only in case of simultaneous reform of the 1. pension pillar

Economic Monitor Issue No. 6 | June 2017


  • New IMF programme signed. Important stability signal for investors
  • GET Georgia recommends economic policy priorities. Comprehensive package of measures by all relevant government departments is needed
  • Unlocking the export potential of Georgian agriculture. Land consolidation and productive alliances can help exploit the export potential
  • DCFTA implementation in Georgia. Implementation mostly on track