The European Bank for Reconstruction and Development (EBRD) predicts 4.5% economic growth in Georgia in 2019 and 2020. According to the Bank’s revised estimates, GDP growth in Georgia will be one of the highest in the Eastern Europe and the Caucasus region.
“Georgia’s economy is on the path of strong economic growth. In 2018, the main driver of growth in the country was trade turnover and financial sector.
The growth of tourism sector is still continuing and if the share of tourism and its services in the 205-2017 was an average of 7.3% of GDP, this figure increased to 8.1% in 2018. However, there is the decrease in growth in the construction sector. For the first time since 2013, the sector has dropped 3.1%” the report notes.
In addition, the EBRD notes that the country’s exports are also increasing against the backdrop of bilateral trade agreements.
“Nevertheless, the volume of direct foreign investments in the country decreased by 34.9% compared to 2017 and was fixed at the five-year minimum – 7.3% of GDP. Reduction of FDI on the one hand is related with the completion of the South Caucasus pipeline construction and on the other hand with the transit of companies to the residual ownership. Despite the reduction, the FDI remains the main source of currency inflows in Georgia” the EBRD report reads.
According to the bank’s forecast, the economies of the region’s countries in 2019 will increase by:
Armenia – 4.5%
Azerbaijan – 3.5%
Belarus – 2%
Moldova – 3.5%
Ukraine – 2.5%
Russia – 1.5%
Kazakhstan – 3.5%
Kyrgyzstan – 3.6%
Turkmenistan – 6.3%
Uzbekistan – 5%
As for the Central European countries, the highest growth 4.1% – is forecasted in Poland, followed by Slovakia with 3.6% growth and Slovenia 3.5%.
The most negative forecast is observed for Turkey. Last year, the national currency of the country devaluated by 29% against USD and the annual inflation rate was fixed fifteen-year maximum – 25%. And as a result in the second half of last year the country’s economy recessed. The bank does not predict growth in 2019 and expects that a reduction in the economy will be within 1%.