Asian Development Bank moves economic forecast for Georgia to 4.2% in 2017

The Asian Development Bank (ADB) is moving its forecast up and saying the Georgian economy will grow by 4.2 percent in 2017 and 4.5 percent in 2018.

Earlier the ADB projected Georgia’s economy to experience 3.8 percent growth in 2017, but due to recent developments in the country the Bank raised its growth forecast for Georgia.

Georgia has benefitted from higher infrastructure spending that is expected to continue through 2018, as well as from strong exports, higher remittances and tourism earnings, and increased foreign direct investment,” said the report.

Georgia’s economy has been growing steadily this year, show the latest statistics. Growth accelerated to 5.1 percent in the first quarter of 2017 from 2.7 percent in the whole of 2016.

The strong performance reflected gains of 21.6 percent in construction, 11.5 percent in communication, and 8.7 percent in hotels and restaurants.

On the demand side, growth drew support from increased government outlays and expanded private consumption enabled by higher remittances and an accommodative monetary policy during 2016.

Net exports contributed to growth for the first time since 2013. Also contributing were larger tourism receipts and improved business activity from higher lending to enterprises.

Georgia’s Deputy Economy Minister Nino Javakhadze commented on the ADB new report and said current economic processes were positively evaluated in the report.

Compared to other countries in the region, Georgia better overcome the foreign shock that the country faced in previous years. This was result of right policy and flowing exchange rate,” she said.

Georgia will experience the highest growth this year compared to the neighbour countries: Armenia (3.8 percent), Azerbaijan (-1.3 percent).