BAKU, Azerbaijan, August 16
By Tamilla Mammadova – Trend:
Investments are also expected to contribute positively to growth in 2021 in Georgia boosted by public infrastructure spending along with increased private sector activity, Trend reports via the leading investment bank in Georgia Galt and Taggart.
“Georgian economy quickly regained COVID crisis losses in 1H2021 helped by pent-up demand, strong goods exports, solid remittances, and ongoing recovery in tourism”, said the report.
Real GDP growth came in at 12.7 percent year-on-year in 1H2021, which is also 5.7 percent higher than the 1H2019 level, “beating market expectations. We now expect 2021 real GDP growth at 8.6 percent up from 7 percent projected in June," says Galt and Taggart:
The new outlook incorporates risks related to the COVID-19 pandemic and related impediments in economic activity in this growth projection.
“Inflation in Georgia remains elevated, with annual inflation at 11.9 percent in July. In our baseline scenario, we expect average inflation of 9.5 percent in 2021, up from the previous 6.9 percent forecast. The rise in global food and oil prices and higher utility tariffs are important factors driving inflation higher along with lari depreciation pass-through and strong demand.
"Uptick in growth also supported healthier fiscal parameters (lower deficit and debt), reflected in the revised budget document. For 2022 we forecast growth to remain solid at 5.7 percent and see the need for bold structural reforms to support strong growth momentum from 2023”, reads the latest report by Galt and Taggart.
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