Galt & Taggart Forecasts 7% Economic Growth in Georgia
By Natalia Kochiashvili
Wednesday, June 8, 2022
Investment bank Galt & Taggart forecasts 7% economic growth in Georgia in 2022. Eva Bochorishvili, the head of the organization's research department, said that the current economic parameters create a realistic basis for the Georgian economy to grow by 7% by the end of the year.
According to Bochorishvili, the results of May and June are of critical importance in determining the economic growth forecast for 2022, because they completely alter the annual rates.
G&T research head says the increase in the second quarter, which is yet to be published, will be crucial. The 2.6% increase in April is pretty good, given that there was a 45% increase in April last year.
“There will be a high base effect in May, although according to preliminary data, a rather high economic growth should be expected in May as well. It turns out that in the first half of the year we will have quite high growth. 10.8% which is a result of 4 months, this is also a pretty good figure; If we look at the growth, which is mainly due to transport - shipments as well as passenger traffic at airports is increasing, which will have a positive impact on transport sector.”
Bochorishvili highlighted positive trends in the field of tourism, restaurants, cafes and other facilities, as well as in the real estate sector, where demand is growing. However she also mentioned the sectors which experienced decline in April - construction and trade, which was affected by rising prices and manufacturing industry due to declining beverage production.
Taking into account the economic growth that is being currently observed, G&T thinks that the annual growth will be more than 7%, however the inflation will still be the factor. It was also noted that in parallel with growth in Georgia, Armenia is experiencing same trends and migrants are also a factor there - for example, in April georgia received $ 132 million in remittances from Russia, while Armenia received almost twice as much - $ 230 million.
“Therefore, whatever trends we see in remittances, we are no exception and it operates in other countries as well.”
Previous day, the TBC Capital also adjusted its economic growth forecast, which expects 7.5% growth in the country this year. The forecast was also improved by the World Bank, which reduced its growth forecast for Georgia to 2.5% at the start of the Ukraine war, but raised it again to 5.5%. The Georgian government expects 6% growth.
