IMF forecast 5% economic growth in 2014

The International Monetary Fund (IMF) forecast on November 6 that Georgias economy will grow by 5% in 2014. The economic performance of the country is expected to improve by almost all parameters, according to the IMF.

"We are optimistic to recover the Georgian economy growth to accelerate to 5 % in 2014, while 2013 will be a slower growth year for the economy and could reach 2.5%, said resident representative of the IMF in Georgia, Azim Sadikov at the presentation of the most recent publication, a regional economic outlook for the Middle East and Central Asia.

During his hour-long presentation, Sadikov focused on the Georgian economy, and discussed factors behind the slowdown, namely:

A slump in private and public investment

Short falling from government spending

"The former reflects weak investor confidence reflecting transition-related uncertainties, while the latter is the result of shortfalls from government spending, especially in capital projects. Despite tax revenue intake not being as strong as projected, the government ran a surplus in the first nine months due to the slow execution of spending, he added.

According to Sadikov, who presented the outlook for local business communities and government representatives in Tbilisi Marriot Hotel, Sadikov noted the strong performance of Georgias external sector in 2013.

"Exports grew strongly, supported by increased tourism, and a gradual re-opening of the Russian market for Georgian products. Imports contracts reflected the weak domestic demand, he noted.

IMF recommends the government to continue the prudent fiscal policy to safeguard the debt sustainability.

IMFs analysis stresses that this is a medium term, it is important to pursue prudent macroeconomic policies, and push structural reforms in order to increase countrys competiveness.