BAKU, Azerbaijan, Feb. 28
By Maryana Akhmedova – Trend:
Georgia’s real GDP growth in 2022 in case of the rapid resolution of the situation in Ukraine may decrease from 6 percent to 3.5-4 percent, while the exchange rate of Georgian lari may decrease by 5 percent, Trend reports via the TBC Capital’s weekly market watch.
According to the updated forecast, in this scenario, the interventions of the National Bank of Georgia (NBG) and a fiscal stimulus financed externally are only moderate, since the net inflow deficit is about $400 million compared to the baseline scenario, and about $170 million better than in 2021, TBC Capital said.
The inflation rate in Georgia in 2022 is only slightly higher than the target, while the monetary policy rate will decrease from the existing 10.5 percent to about 9 percent, the forecast said.
However, it is possible that the rate will be tightened by 0.5 percentage points until the relatively timely solution scenario becomes more visible, TBC Capital noted.
Meanwhile, according to TBC Capital’s forecast, in case of speedy resolution of the situation in the region, in 2022, Georgia’s exports will increase by 0.5 percent year-on-year (12 percent in the baseline scenario), imports - by 9.7 percent (17.9 percent in the baseline scenario), the remittances in the country - by 2.3 percent (11 percent in the baseline scenario), and FDIs - by 10 percent (29.3 percent in the baseline scenario).
However, the tourism revenues will decrease by 32.2, compared to the 2019 level (20-percent decrease in the baseline scenario).
In case of a rapid resolution of the situation in Ukraine, TBC Capital predicts a strong economic recovery in Georgia in 2023.
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