Moody's expects Georgian economy to grow by 7.3% in 2021
Moody's expects growth to be at potential of 4-5% in the next few years. Photo: Nino Alavidze/Agenda.ge.
Tweet 
Share
Global ratings agency Moody's expects the Georgian economy to grow by 7.3% in 2021, following a 6.2% contraction in 2020, 'driven by the collapse of the tourism sector and the domestic impact of lockdowns and movement restrictions in the wake of the pandemic', says Moody's.
The recovery is underpinned by fiscal policy support to consumption in 2021 and signs of a steady rebound in regional tourism. Remittances and non-tourism exports, such as beverages, vehicles and machinery and equipment, have also demonstrated robust growth", says Moody's.
Moody's expects growth to be at potential of 4-5% in the next few years, driven by increased investment in productivity-enhancing infrastructure in agriculture and manufacturing, further increases in exports to more diversified markets including Europe, partly reflecting additions to Georgia's free trade agreements, and as incomes continue to rise supporting consumer spending.
Moody's expects inflation to fall towards the National Bank of Georgia's (NBG) inflation target of 3% from 12.8% currently after temporary factors fade and tight monetary policy offsets commodity price and international supply constraint pressures.
The current account deficit will also begin to narrow from a peak of 12.5% of GDP in 2020 towards pre-pandemic levels of around 5%, as remittances and non-tourism exports grow solidly and the longer-term benefits of reforms are realised, including reform of the pension system to build domestic savings", said Moody's.
To note, Moody's Investors Service has affirmed the government of Georgia's Ba2 local and foreign currency long-term issuer ratings and foreign currency senior unsecured rating. The outlook remains stable.
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'.
Georgian Foreign Minister David Zalkaliani has stated that taking the 75 million euro EU loan by the Georgian government would be unjustified when the state economy has increased by 12 per cent over the past six-seven months.
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'.
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.
The Georgian economy is expected to grow by 8.5% in 2021 driven by an expansion in agriculture, industry, and services and the gradual lifting of restrictions imposed due to the coronavirus disease (Covid-19) pandemic, the Asian Development Bank (ADB) said in its annual flagship economic publication the Asian Development Outlook 2021 Update.
The estimated real gross domestic product (GDP) growth rate in August 2021 amounted to 10.3% year-on-year and 12% in January-August of 2021 year-on-year, show preliminary data from the National Statistics Office of Georgia (Geostat).
Georgia is leading the South Caucasus region with a projected rebound of 8% this year, says the latest edition of the World Bank’s Economic Update for the region, released today. "Georgia’s recovery is expected to edge down to 5.5% in 2022 and 5% in 2023, as macroeconomic support continues to be removed", reads the report.
The International Monetary Fund (IMF) projects the Georgian economy to grow 7.7% in 2021 and 5.8% in 2022, reads the latest report titled World Economic Outlook: Recovery During a Pandemic. With these indicators Georgia will have one of the highest economic growth rates in the region of the Middle East and Central Asia.