Gov’t raising economic growth forecast from 5% to 6.5%, increasing budget by $190mln

Georgian Prime Minister Irakli Garibashvili on Friday said the Government had raised its growth forecast for 2023 from the earlier five to 6.5 percent and was adjusting the state budget with a ₾500 million ($190mln) increase based on the increased growth rate.

Garibashvili noted the budget was increasing for the third year running and enabled financing “very important” programmes over the recent years.

We will also finance other important projects that are proceeding at an active pace, be it infrastructure, social direction or healthcare”, he said.

We have already started working on the new 2024 budget. We discussed the first version of the budget with the Minister of Finance and his team, as well as in the format of the Economic Council, and we will present it to the Parliament at the end of the month, around September 29”, Garibashvili added.

The PM also said the Government debt had been lowered from 60 percent of the gross domestic product two years ago to around 38 percent, while reserves were “at an all-time high” of over $5.5 billion.

He also cited “historic low” figures for poverty and unemployment and an “almost tenfold” increase in citizen deposits in commercial banks over the past decade. “The economy is completely different this year than it was 10 years ago”, he claimed.

July statistics published by the National Bank of Georgia last month showed commercial banks in Georgia loaned ₾47.79 billion ($18.18bln) and received deposits of ₾47.78 billion ($18.18bln) in July.

The volume of loans increased by 0.98 percent compared to the previous month, while the number of deposits increased by 2.11 percent month-on-month.

In July, the volume of term deposits increased by 2.44 percent while also increasing for on-demand deposits by 1.91 percent, the NBG also said.

Loans taken out in the national currency amounted to ₾7.50 billion ($2.85bln), while loans in foreign currencies constituted ₾13.48 billion ($5.13bln).