Q4 2016: Real gross domestic product growth reaches 1.2%

Georgia’s estimated real gross domestic product (GDP) growth rate amounted to 0.3 percent year-on-year (y/y) in December 2016, show the latest data from the National Statistics Office of Georgia (Geostat).

Meanwhile, the estimated real GDP growth reached 1.2 percent for fourth quarter (Q4) 2016 y/y. The estimated annual growth of real GDP equalled 2.2 percent in 2016, said Geostat.

The National Bank of Georgia (NBG) and various international financial institutions, such as global rating agency Moody’s, Bloomberg and World Bank Group, projected Georgia’s economic growth would reach three percent in 2016.

The International Monetary Fund (IMF) had projected 2.7 percent growth for Georgia’s economy in 2016 and predicts four percent growth for 2017.

Global rating agency Fitch Ratings forecast 3.2 percent growth in 2016 for Georgia.

As for government authorities, Georgia’s Prime Minister Giorgi Kvirikashvili had earlier stated the goal was to achieve 3.5 percent economic growth in 2016 and hit six percent in 2017.

In his interview with Bloomberg, Georgia’s Finance Minister Dimitry Kumsishvili said economic growth may exceed five percent in 2017 thanks to tax cuts and planned infrastructure spending, helping to ease pressure on the nation’s ailing currency.

The minister believes there are realistic prospects of beating the government’s 2017 target of four percent growth and meeting the World Bank’s forecast of 5.2 percent. An additional 600 million GEL (about $222 million/€208 million*) in infrastructure spending, a free-trade deal with China and the removal of taxes on reinvested company profits will all help to boost the economy, he said.

*Currency conversions reflect National Bank of Georgia values as of today.