Asian Development Bank forecasts 5% economic growth in Georgia in 2019

The Georgian economy will grow by 5% in 2019 and by 4.9% in 2020 with higher investment spending, says Asian Development Bank’s flagship economic publication.

Georgia has proven attractive for foreign direct investments (FDIs) in the region with its business-friendly environment and increasing integration into global value chains. Georgia can reap significant economic dividends by leveraging its fast-developing facilitative infrastructure for economic connectivity within the country and in the region by further diversifying its economy and export base, while addressing skills mismatch in the labour market”, said ADB Country Director for Georgia Yesim Elhan-Kayalar.

Shortage of qualified workers remains a constraint for attracting FDIs, said the ADB report, suggesting stronger private sector involvement in training for entrepreneurship would help, as would efforts to encourage more women to enter business.

Net exports, consumption, and investment are expected to support growth in 2019 and 2020, bolstered by higher infrastructure outlays. Wholesale and retail trade, finance, and construction are expected to expand in 2019. 

Higher investment should accelerate growth in agriculture to 2.6% in 2019 and 2.8% in 2020 with favourable weather, said the ADB report.

Inflation is projected to accelerate to 3.2% in 2019 before slowing to 3% in 2020. 

The central bank is likely to reduce the policy rate gradually towards the end of 2020 if inflation remains below 3%, said the report.