Policy and Management Consulting shares outlook on Georgia's economic climate

Georgia Materials 18 March 2022 10:40 (UTC +04:00)
Policy and Management Consulting shares outlook on Georgia's economic climate
Maryana Ahmadova
Maryana Ahmadova
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BAKU, Azerbaijan, March 18. Georgian economists have assessed various issues that have a significant impact on the economy of Georgia, such as remittances, foreign direct investments (FDIs) inflow, monetary policy, and inflation, Trend reports, citing the statistical data from Policy and Management Consulting Group (PMCG), based on the survey conducted among Georgian economists.

Thus, 71.4 percent of the experts agreed with the decision of the National Bank of Georgia (NBG) on keeping the refinancing rate at 10.5 percent. Meanwhile, the NBG increased the refinancing rate in Georgia by 0.5 percent to the current rate on December 8, 2021.

As for the NBG’s macroeconomic forecast for 2022, which envisages the inflation rate at 7 percent, and the refinancing rate at 8.5 percent in the baseline scenario, 60.7 percent of the respondents agreed with it.

However, 25 percent of the economists believe in the pessimistic scenario, according to which the inflation rate will be at 8 percent, while the refinancing rate - is at 10 percent.

Meanwhile, most of those surveyed consider the tightened refinancing rate as one of the main factors for the national currency (Georgian lari) noticeable appreciation recorded from January 18 through February 9, 2022. At the same time, the remittances inflow and the tourism recovery were also mentioned as possible causes.

Regarding Georgia’s economic sectors that possibly will be affected the most due to the hostilities between Russia and Ukraine, 68 percent of the respondents think that the tourism sector will be damaged significantly, while 64 percent consider the depreciation of the Georgian lari as another major outcome. At the same time, the majority of those surveyed predict a sharp decrease in exports and remittances inflow.

Meanwhile, Georgia’s economic climate in the first quarter of 2022 has aggravated, compared to the fourth quarter of 2021, but improved, compared to the same period of 2021.

According to the research, the forecast for the Georgian economy for the next 6 months is even worse. Based on the results of the survey conducted, the expected real GDP growth in Georgia for 2022 is 4.9 percent.


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