Georgian GDP saw a 4.7% growth in 2018

According to the preliminary report published by GEOstat, in 2018, the amount of Gross domestic product (GDP) in current prices amounted 41 077.5 mln GEL, which is an 8.5% growth compared to the last year’s results.

The real GDP growth in 2018 was 4.7% from 2017 and the deflator percentage change amounted to 3.6%.

According to the initial prognosis from the government, the GDP was supposed to rise with 4.5% in the last year, but later it was changed to 5%. (See table 1) (* preliminary results)

In 2018, an International Monetary Fund (IMF) team, led by Ms. Mercedes Vera-Martin, visited Tbilisi during in August 2018 to monitor and discuss Georgia’s financial progress. After the visit, the IMF decided to revisit the initial 2018 growth projection and rise it to 5.5 percent as a result of stronger than expected economic activity. They issued a statement:

“Considering the stronger economic activity, the GDP growth projection for 2018 was revised upwards from 4.8 percent to 5.5 percent. The strong economic activity and weaker terms of trade are expected to widen the current account deficit. Increased downside risks to the outlook, driven by regional developments and global trade tensions, call for building up reserves and continued exchange rate flexibility, which has served the country well; and prudent macroeconomic policies to bolster resilience to external shocks.

The team welcomed the progress made by the authorities in implementing structural reforms and ongoing initiatives and stressed the need for continued efforts to support higher and more inclusive growth. The authorities have established an independent pension agency and adopted regulations to implement the new public-private partnership law. They are also making progress toward modernizing the insolvency law and regulations to promote responsible lending. The current economic environment offers an opportunity to advance structural reforms to increase economic resilience, boost private-sector led growth, diversify the economy, and improve the living standards of Georgian citizens.”

In the industrial structure make-up of the GDP, trading (17.0 percent) and industry (17.0) are the apparent forerunners. The rest of the positions are held by transport and telecommunications (10.2), construction (9.3), government administration (8.2), agriculture, fishery (7.7), operations with the real estate, lease and service providing (7.4) and healthcare and social welfare (5.8). See the chart (*preliminary results)

In 2018, finance (13.5 percent) and communal, social and personal service (13.2 percent) spheres saw the biggest growth compared to the last year’s results. Followed by operations with the real estate, lease, and service providing (12.1 percent).

There was a -3.1% decrease in the construction industry, but, as mentioned above, it still amounted 9.3% of the GDP.