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NBG Published Economic Growth Forecast

National Bank of Georgia (NBG) expects economic growth within the frame of 4 percent.

According to the central bank, the growth will be basically conditioned by increase of total consumption and investments, which will be supported by the fiscal stimulus, infrastructural projects and business environment improvement. Forecast made by the exports of NBG envisages that impact of external shocks will be reduced in 2017, but negative factors impacting on the net export will be still sustained. Growth of net export will be slightly improved, but it will still have a negative contribution in GDP growth.

The bank notes, that sharpened political and economical condition in the region has a negative impact on the net export, which is reflected on Georgian export and remittances. As for the risks of GDP forecast, external sector occupies the basic place. Namely, on the background of political tension, if the mentioned shock is deepened more than expected, the mentioned shock will be transferred to Georgia, then economic growth will be declined comparing to the forecast.

According to NBG, USD exchange rate on the international foreign currency market is baring risks as well, which reflects on the exchange rates of Georgian trade partners and has an impact on GEL exchange rate. Positive impacts might be taken from the Free Trade Agreement with the EU or acceleration of investment projects.