Georgia Leads Europe and Central Asia in GDP Growth - World Bank
GDP growth in Georgia
Georgia is leading in GDP [gross domestic product] growth in the European region and Central Asia, according to a regional economic review of the World Bank.
According to the report, in 2022 the growth forecast for the Georgian economy rose to 8.8% instead of the expected 5.5%, the highest figure in the Europe and Central Asia region.
The volume of goods produced in the South Caucasus in 2022 will increase by 5.6%, also the largest growth in the European and Central Asian regions.
“In 2023, the price growth trend is expected to decrease due to lower demand. And long-term, fixed-price contracts are likely to help cushion Georgia’s energy price shock,” the report says.
Economic growth is largely due to increased local demand, remittances, and tourism revenue, Sebastian Molineus, World Bank Regional Director for the South Caucasus, said.
“At the same time, we believe that both the Georgian government and the National Bank should remain vigilant. Of course, if inflation rises monetary policy will need to be tightened. And, of course, we advise the government to take a prudent approach and use any additional revenue to ease the fiscal burden,” Molineus said.
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According to a preliminary estimate by the National Statistical Service of Georgia, in August 2022, compared to last year, the Georgian economy (GDP) grew by 10.5%, and the average figure for eight months of the year was set at 10.3%.
The influx of migrants had had a positive impact on the Georgian economy, although this is a one-time effect, experts from the Asian Development Bank note.
Despite the rapid dynamics of economic growth, food prices in Georgia are growing rapidly. Manufacturers attribute the increase in prices to Russia’s invasion of Ukraine, complex logistics from Russia, and an increase in prices on products and raw materials on the world market.