Despite the 7.3% economic growth for four months of the year, the World Bank in Georgia expects decline in its growth rates in the nearest future, Report informs via Sputnik - Georgia.
According to the data from the National Statistics Office of Georgia, the GDP grew 7.5% in April of 2023 compared to the same period of 2022 and the average rate of real GDP growth in January-April 2023 made 7.3%.
Economic growth is mainly driven by spending on services, while industrial activity is declining, the report says, adding that going forward, economic growth is expected to slow to 4.4% during 2023, reflecting slower growth in Georgia’s trading partner countries until it stabilizes at 5%.
At the same time, it is noted that the low inflation rate, which reached 1.5% in May due to low international prices and the strengthening of the national currency lari, will remain below the target level of 3%, subject to a tight monetary policy.
At the same time, it was noted that the existing risks are balanced, on the one hand, by the fact that a change in cash inflows, along with tightening global conditions, may have a negative impact on the lari exchange rate and potentially on macro-financial stability due to the high level of dollarization, and on the other hand, cash inflows may continue for a longer period, and Georgia will receive income from the renewal of trade links and transport corridors.
Meanwhile, globally, the World Bank predicts a decline in global economic growth from 3.1% to 2.1%, and in emerging markets and developing countries the decline will be from 4.1% to 2.9%.
At the same time, in countries with leading economies, growth is expected to decline from 2.6% to 0.7%, while the tightening of monetary policy and rising prices for energy resources will be decisive for them.