World Bank leaves Georgia’s economic growth prospects unchanged

The World Bank has left Georgia’s economic growth prospects unchanged.

The World Bank has lowered its forecast for global economic growth. The World Bank's new report says that global economic growth will be 2.4%, instead of the expected 2.9% in January.

"The global economy is fragile. Growth is weak, but the world economy is not in recession. Economic recovery is continuing," said World Bank economist Coase Ayhan.

The Bank predicts that in 2017 the GDP will increase to 2.8% and to 3% in 2018.

As for Georgia, the economic growth forecast will be 3% in 2016, 4,5% in 2017 and 5% in 2018.

Georgia had bigger expectations for economic growth over the last year. However, the depreciation of the national currency against the dollar has changed the positive prospects.

The national currency, the Lari, is gradually improving in relation to the USD, however, there are various beliefs as to what caused its depreciation.

There are some people in the ruling Georgian Dream coalition who still believe that the former head of the National Bank of Georgia, Giorgi Kadagidze, took steps that caused the national currency's depreciation.

They said Kadagidze was affiliated with the previous ruling - and current opposition – party, the United National Movement.

This year the NBG has a new head and the national currency is gradually improving.

These immediate improvements also cause question marks amongst many.

Some believe the National Bank, with its new head, is taking such steps that will cause temporal improvements just before the elections, to encourage people to vote for the current ruling party.

There are some others who think the new leadership really provided positive outcomes and the recent situation abroad was also calmer compared to previous years, which has helped the GEL.

Undoubtedly, more will be clear after the October 8 parliamentary elections. One thing is obvious, however; Georgia requires a more effective economic policy.