Asian Development Bank raises Georgia’s economic growth forecast to 7% in 2024

The Asian Development Bank has raised Georgia’s economic growth forecast, saying the gross domestic product of the country would grow by seven percent this year instead of the previous projection of five percent made in April, in a new report published on Wednesday.

The report said Georgia’s economic growth this year was accelerated by a “rapid” expansion in services coupled with “higher” domestic consumption.

Lesley Bearman Lahm, the ADB Country Director for Georgia, said the country’s economy continued to show “steady progress” despite geopolitical risks.

This bodes well for the country’s ability to continue strengthening regional connectivity, supporting the private sector, developing human capital, and investing in climate-resilient agriculture”, she added.

The report says inflation in the country slowed in the first half of the year, reaching 1.1 percent, before rising again, to 2.2 percent, in June.

This was mainly driven by increased transportation costs, owing to unstable oil prices, and elevated prices for tobacco and alcoholic beverages. A relatively stable exchange rate and prudent fiscal policy helped keep prices from rising faster”, the report said.

During the first half of the year, an 18.5 percent increase in revenue helped erase the fiscal deficit, the report added, noting a “balanced budget” and a relatively stable national currency contributed to a reduction in the ratio of public debt to GDP to 38.9 percent in the middle of this year, down from 39.2 percent a year earlier.

Meanwhile, money transfers fell by 30.3 percent in general, while those from Russia plunged by 71.4 percent, even as they were partly offset by higher inflows from the United States and Europe.

The ADB said risks to the current account included domestic policy uncertainty and geopolitical risks, which might exacerbate exchange rate pressures. In addition, potential disruption to trade from the knock-on effects of the Russian invasion of Ukraine could hit supply chains, creating inflationary pressures from higher commodity prices.

The country’s growth outlook for 2025 remains unchanged, with an anticipated growth of 5.5 percent, the Bank added.