Georgian PM on Fitch's revised outlook: 'Georgia has practically returned to the pre-pandemic rate'
Fitch Rating says that Georgia's economic recovery has gained 'surprising momentum', which has led the agency to revise up 2021 real gross domestic product (GDP) by 3.5 percentage points from the review six months ago, to 7.8%. Photo: Nino Alavidze/Agenda.ge.
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Following a 'much-improved' macroeconomic baseline, Fitch Ratings has revised the outlook on Georgia's long-term foreign-currency issuer default rating (IDR) to stable from negative and affirmed the IDR at 'BB'.
Georgian Prime Minister Irakli Garibashvili said that with this decision Georgia 'has practically returned to the pre-pandemic rate'.
The agency cites faster-than-expected economic recovery, strong and convincing macroeconomic policies and high international support as the main reasons for the improvement in the rating outlook. We see that our economy is recovering at a really impressive pace, with a rate of 12.7% in the last six months, which is really promising", Garibashvili said.
Fitch Rating also says that Georgia's economic recovery has gained 'surprising momentum', which has led the agency to revise up 2021 real gross domestic product (GDP) by 3.5 percentage points from the review six months ago, to 7.8% (after a contraction of 6.2% in 2020), implying that output will exceed its 2019 level this year.
For 2022-2023, a more robust recovery in the tourism sector and an increase in investment, means we forecast real GDP growth to average 5.4%, above potential of 4-4.5%. Risks surrounding the pandemic, pace of vaccination roll-out, and upcoming local elections in October, pose downside risks to our macroeconomic baseline", says Fitch.
Georgian Economy Minister Natia Turnava has also commented on the revised outlook of Fitch and said that it reflects increased confidence from international investors in Georgia.
She said that both local and international investors pay great attention to the decisions of Fitch.
"This is a very good precondition for us to have very high economic growth at the end of the year, to completely eliminate the previous year's losses and to maintain the position of economic growth leader in the region", Turnava said.
The estimated real gross domestic product (GDP) growth rate in June 2021 equaled 18.7 per cent year-on-year and 12.7 per cent in January-June of 2021 year-on-year, the preliminary data of the National Statistics Office of Georgia (Geostat) show.
Georgian politicians have welcomed the 2021 Investment Climate Statements on Georgia published by the US Department of State today. Georgian Economy Minister Natia Turnava said that according to the statement the decisions made by the Georgian economic team contribute to the improvement of the investment environment and make all sectors of the Georgian economy attractive for foreign investors.
Business and investment conditions are sound in Georgia, however, there is an increasing lack of confidence in the judicial sector’s ability to adjudicate commercial cases independently or in a timely, competent manner, read the 2021 Investment Climate Statements about Georgia published by the US Department of State.
The International Monetary Fund (IMF) projects the Georgian economy to grow 7.7% in 2021, 'a significant upgrade from just a few months ago, which implies that output will exceed its 2019 level this year', reads a concluding statement of the IMF staff at the end of an official visit in Georgia.
The estimated real gross domestic product (GDP) growth rate in July 2021 amounted to 9.9% year-on-year and 12.2% in January-July of 2021 year-on-year, show preliminary data from the National Statistics Office of Georgia (Geostat). The International Monetary Fund (IMF) projects the Georgian economy to grow 7.7% in 2021, 'a significant upgrade from just a few months ago, which implies that output will exceed its 2019 level this year'.
Nominal gross domestic product (GDP) amounted to 15.91 billion GEL in the second quarter of 2021, while the real GDP grew by 29.9 percent year-on-year and GDP deflator increased by 10.3% in the reporting period, show the latest data from the National Statistics Office of Georgia (Geostat). The IMF projects the Georgian economy to grow 7.7% in 2021, 'a significant upgrade from just a few months ago, which implies that output will exceed its 2019 level this year'.