In 2017 Georgia Enjoyed Highest Growth in 5 Years

SET-PI has updated its forecast of Georgia’s real GDP growth rate for the first quarter of 2018. Here are the highlights of this month’s release:

• Geostat has published its rapid estimate of real GDP growth for the fourth quarter of 2017. Estimated growth stands at 4.7%, which is only 0.1% higher than the value forecasted in the last update of our model.

• Given the latest data, Georgian annual real GDP growth in 2017 amounted to 4.8%. Our annual GDP forecast of 4.7% (since November 2017), and 4.8% (since December 2017), therefore turned out to be quite accurate.

The other set of variables which has had a significant positive effect on the predicted real GDP growth was related to the external sector. Georgia exports continued to expand, increasing by 49% yearly in December 2017, while imports were up by 15%. The trade deficit, however, deepened by 0.8% yearly, and amounted to 557.1 million USD.

The improvement in trade statistics was mainly due to better economic conditions in the entire region. Moreover, exports to China contributed significantly to growth in export revenues (mainly through copper ores and ferroalloys exports). Georgia also continued to export more wine to China. Cigarette exports increased by more than 14 times, mainly due to the increase in tobacco excise taxes. The only export category that experienced a significant decrease during the last month of 2017 was hazelnut exports.