Asian Development Bank forecasts Georgian economy to grow 5% in 2024, 5.5% in 2025

Georgia's gross domestic product has been forecast to grow by five percent this year by the Asian Development Outlook, the flagship annual economic publication of the Asian Development Bank.

Published on Thursday, the report said growth was expected to accelerate to 5.5 percent in 2025, boosted by “continued gains” in tourism and investment.

Lesley Bearman Lahm, the ADB Country Director for Georgia, said the country had been “growing steadily” in recent years.

A strong focus on regional cooperation, private sector-led growth, developing the country’s undoubted human capital, and adopting policies and actions that fast-track the transition to a greener and more climate resilient economy will help to accelerate prosperity and strengthen social security”, she said.

The ADB said inflation was projected to accelerate slightly to 3.5 percent in 2024 and further to four percent in 2025 as commodity prices rose moderately.

It said the fiscal deficit was projected to satisfy the Government’s fiscal rule by remaining below three percent of GDP in 2024 and 2025, reflecting further improvements in revenue administration, rationalisation of tax expenditures and “sound management” of public debt.

Meanwhile, revenue was projected to rise to 28 percent of the GDP in 2024 and 28.5 percent in 2025 due to higher tax collections.

Other projections include:

• Growth in services - to 5.5% in 2024, 6.3% in 2025
• Growth in industry - to 4.2% in 2024, 4.9% in 2025
• Agriculture - to 0.5% in 2024, 1.1% in 2025 
• Imports - by 6.1% in 2024, 11.1% in 2025

The Outlook read money transfers were forecast to stabilise at around $3 billion over the next two years, which could put downward pressure on the Georgian national currency lari from slowing or reversing inflows associated with Russian migrants.

The ADB said Georgia was experiencing an ageing population because of below-replacement fertility, increasing life expectancy, and outmigration of working-age people.

It suggested the Government needed to strengthen social protection programmes and create new jobs for the elderly to promote social inclusion and noted it was “critical” for the Government to introduce policies that encourage women to enter the labour force.