Economy Minister: Georgia’s economy will grow 3% and more in 2016

Georgia’s economy will grow more than three percent, believes Georgia’s Economy Minister Dimitry Kumsishvili, citing recent positive indicators as the basis for his encouraging forecast for the local economy.

While presenting April’s economic indicators Kumsishvili said Georgia’s economy had experienced positive growth since February and he believed this trend would continue.

In April 2016 the country’s estimated real Gross Domestic Product (GDP) growth rate reached 4.3 percent year-on-year (y/y), while the estimated real GDP average growth equalled 2.3 percent for Q1 2016 y/y and 2.8 percent for the first four months of 2016 y/y.

Kumsishvili identified several sectors that saw the most increased GDP: 

• Production of construction materials (25 percent);
• Hotel and restaurant sector (25 percent);
• Construction (15 percent);
• Production of food and drinks (10 percent).

The Economy Minister further explained that Georgia’s economic growth was also caused by the Government’s efforts to encourage local businesses.

Inflation is reducing and in April it reached 3.2 percent. Reducing the inflation rate was caused by minimising the negative expectations in the Georgian economy. This is gradually reflecting on our citizens pockets – they now will pay less while buying products,” said Kumsishvili.

Georgia’s reducing unemployment was also mentioned by Kumsishvili. Last year the annual unemployment rate in Georgia declined by 0.4 percentage points and equalled 12 percent. The National Statistics Office of Georgia (Geostat) said this was the lowest level in the past 12 years.

Kumsishvili highlighted the positive effect of the strengthening the Georgia’s national currency, the Lari (GEL). He said the Lari had strengthened 15 percent since March and one of the major reasons for this was regulating Georgia’s export-import balance.

Geostat said Georgia’s trade deficit equalled $2.071 million in January-April, which made up 63 percent of total trade turnover.

Growing tourist numbers was also another driving force for the Georgian economy and its currency. Kumsishvili said Georgia received $92 million more income from tourists in the first four months of 2016 than in the same time in 2015.