The leading investment bank in Georgia Galt and Taggart revised 2021 growth upwards to 8.6% in Georgia.
“The recovery has gained impressive traction since April,” says the recent report pointing at figures.
The real GDP growth came in at 29.8% YoY in Q2 after shrinking by 4.5% in Q1.
As a result, the economy expanded by 12.7% YoY in H1, surpassing also pre-pandemic level (H1 2019) by 5.7%. The recovery was supported by removing mobility restrictions, robust growth in remittances and exports and a faster than expected rebound in tourism, along with fiscal stimulus.
Growth was broad-based with the hospitality sector boosted by resumed tourism and lifting of restrictions, manufacturing benefited from global commodity price growth, while trade was supported by a recovery in regional economies (notable growth in car re-exports and copper) as well as strong local demand. Construction was boosted by public infrastructure spending along with strong private sector activity on the back of improved sentiments.
“External inflows posted strong growth in H1, but imports (+18.9%) also increased amid strong demand. Notably, remittances and goods exports surpassed pre-pandemic levels and strong external inflows expected to contribute to a narrowing of the current account deficit to 9.5% of GDP in 2021 from 12.5% of GDP in 2020”, the report said.
“If Georgia avoids strict COVID-related restrictions and vaccination accelerates, we also see the likelihood of higher growth at 11.2% in 2021. For 2022, we forecast growth to remain solid at 5.7% and to support strong growth momentum from 2023 we see need to attract FDI”, says Galt and Taggart. (AzerNews/Business World Magazine)
