ISET has lowered Georgia’s economic growth forecast
ISET has lowered Georgia’s economic growth forecast. In Georgia ISET expected 6,2% annual economic growth in case of “worst scenario” and 6,6% - in best case. According to the new forecast, this year, with the “worst scenario”, Georgia’s economic growth will make 5,0% and 5,3% - in best case.
In the second quarter, economic growth in Georgia lagged behind ISET forecast, however, the research institute forecasts 5,3% economic growth in the third quarter. Note that the government’s target economic growth is 4%.
Among factors positively influencing the economic growth forecast, ISET names improvement of foreign factors and increase of business and consumer confidence index, however, the forecast is still being negatively influenced by raised inflation rates. In August 2017, the level of inflation in Georgia, compared to the previous months, made 2% and the annual inflation rate reached 5,7%. In addition, among positive factors, increased money transfers and tourist inflow have been named among positive factors.
At ISET we were explained that “Georgia is among the countries, in which family incomes are significantly dependent upon money transfers from abroad and those generated from tourism, which also influences GDP growth forecasts”.