4.6% Economic Growth Recorded in February
According to Geostat, the national statistics service of Georgia, in February 2019, compared to the same period of 2018, the pace of GDP growth was at 4.6%. At the same time, according to Geostat, the average real growth in January-February constituted 4.1%.
In February 2019, as compared to the same period in 2018, an upturn was recorded in the processing industry, trade, real estate transactions and various services. At the same time, a downturn was recorded in the housing sector. According to government forecasts, economic growth at the end of 2018 was expected to constitute 4.5%.
“In the processing industry, the growth is mainly determined by the volume of food products and beverages, as well as by a growth in the chemical industry. This consideration is proven by the fact that, for instance, exports of natural wines rose by 31%, exports of mineral and spring waters increased by 36%, and exports of nitric fertilizers climbed up by 24%.
At the same time, developments in the metallurgical industries influences the processing industry. In this respect, we should mention that the export of ferrosilicon manganese rose by 57%. As for real estate transactions, the growth was reported as a result of growing demand for services in this field, especially growth from the preparation of sales in real estate, and an upturn in the turnover of companies providing leasing services.
In the field of trading, growth tendencies were mainly determined by growth in the import of natural gas, oil, and oil products. It should be noted that the re-exports indicator has increased by 35%. The quantity of tourist visits has increased by 5%, and this factor ensures a high turnover, as indicated in the trading sector. As for a downward trend in the housing sector, and this is related to a declining number of construction projects, especially, main pipelines, communications, and electricity transmission lines”, Geostat Director Gogita Todradze noted.
In February 2019, as compared to the same period in 2018, the number of new registered enterprises rose by 2.5% to 4357, while the turnover of VAT-paying companies rose by 9.8%.
It should be noted that the International Monetary Fund (IMF) does not expect that the Georgian economy’s pace of growth will accelerate in 2019. The IMF maintained their forecast at 4.6%. In its new report of World Economic Outlook, IMF indicates that the country will be able to regain 5% growth in 2020.
It is worth noting that the IMF mission forecast a 4.6% upturn in February 2019, when the IMF’s official estimation was 4.8%. 4.6% growth is also forecast by the World Bank (WB). Its report suggests that GDP growth pace is decelerated by narrowing external demand, and the National Bank’s decision to tighten regulations aimed at promoting creditors with a sense of responsibility. It is also noted that these regulations will weaken crediting volume, but strengthen the banking sector.
The World Bank (WB) has lowered Georgia’s GDP growth forecast. Under the new report, the WB forecasts 4.6% economic upturn in Georgia, down 0.4% compared to the initial prognosis. Under the revised forecasts, in 2020 the economy will grow by 4.8% in 2020 and by 5% in 2021.
As for previous years, the Georgian economy grew by 4.7% in 2018, 5% in 2017, 3.4% in 2013, 4.6% in 2014, 2.9% in 2015 and 2.8% in 2016.