BAKU, Azerbaijan, April 9. The government’s initiative on the relocation of international companies operating mostly in the IT sector to Georgia is an upside to the country’s GDP growth, Trend reports via the economic review from the Galt & Taggart investment bank.
According to the bank’s initial GDP growth forecast, Georgia’s economic growth is projected at 3 percent in 2022, however, moving the international companies to Georgia may lift the GDP growth to 4-4.5 percent.
Georgia’s GDP growth in February 2022 (14.6 percent) appeared to be the highest in the region, which is partially explained by the low base of the last year, however, the strong growth in external inflows and the domestic demand were the key reasons, the report said.
Georgia’s economic growth from January through February 2022 was supported by the increased activity in several sectors, such as industry, transportation and storage, hotels and restaurants, entertainment, trade, and real estate, the bank noted.
Meanwhile, the COVID-19 restrictions were fully lifted from 28 March, which is expected to support the strong growth in the tourism and catering sectors - those significantly affected by safety regulations, the bank said.
Galt & Taggart also believe that there are upsides to the GDP growth from migrants and trade flows despite the difficulties to quantify the extent of precise impact currently.
"We estimate that the influx of migrants from Russia, Belarus, and Ukraine may add 0.3-0.5 percentage points to the GDP growth, while the redirection of international cargo flows through Georgia may expand it by another 0.7 percentage points," the bank concluded.
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