The Georgian economy is expected to grow by 3.5% in 2021, rebounding with the gradual lifting of the Covid-19 pandemic restrictions and revival of domestic demand, reads the Asian Development Bank (ADB) Outlook 2021.
The ADB projected Georgia’s gross domestic product (GDP) growth to accelerate to 6% in 2022 as a full reopening of the economy and expected recovery in tourism boost travel and commerce.
Following the ADB's forecast inflation will slow to 5% in 2021 and 3.5% in 2022, although this remains above the National Bank of Georgia’s inflation target of 3%. The current account deficit is projected to narrow to 10% of GDP in 2021 and 7% in 2022 as the merchandise trade balance and tourism gradually improve.
With extensive government support to offset food supply disruptions, agriculture is expected to grow by 3.2% in 2021 and 3.9% in 2022. Investment is projected to contract in 2021 as private investment falls by 7.5% but should expand next year.
Exports are projected to grow by 7.1% in 2021 before ramping up by 20.4% in 2022 as the global recovery strengthens, while imports are projected to expand moderately by 3.6% in 2021 and by 8.9% in 2022", says the ADB.
The ADB report highlighted the need for Georgia to elevate agriculture development by improving farm knowledge, connectivity, financial access, and technological capability. Establishing modern agroprocessing, improving market access, and attracting private investment could foster competition and improve export potential.
The government should also continue encouraging investment in irrigation systems to enhance productivity, improve the quality of its agricultural exports, and meet the standardisation requirements of the European Union and other advanced markets.