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Even If We Have To Tighten Regulations In September, GDP Growth Will Still Be High This Year – TBC Bank

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Natia Taktakishvili
02.07.21 13:00
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Even if we have to tighten regulations in September, GDP growth will still be high this year, - TBC Chief Economist Otar Nadaraia declares and notes that the statistics of recent months give positive signs, so TBC Capital has made the decision to adjust the economic growth forecast and increase it to 10.5%. Otar Nadaraia explains that even more growth is provided by the optimistic scenario.

The economic growth rates for 2021 exceeds not only the 2020 data, but also the economic growth of 2019.

As for the high economic growth recorded in the last 2 months (April - 44.8%; May - 25.8%) Otar Nadaraia talks about several reasons. He says that fiscal stimulus is one, though not the only, component of recovery.

"If we look at other incomes, we have quite a sharp growth there. This growth is not only due to the gradual recovery of tourism, but also due to the fairly good recovery of exports, which is at the level of 2019, and we think it will increase even more, especially re-exports. Imports are also quite recovered and an increase in tourism-related imports is still expected. It is very important that we have a fairly large increase in remittances. Fiscal stimulus was also quite large in 2020 and 2021 and exceeded the 2019 figures.

Moreover, credit investments of the financial sector, which neither decreased in 2020 nor will increase in 2021. This year’s figure is significantly higher compared to 2019.

In general, there is a boom all over the world this year. The growth forecast for the US economy is 7%, although the US economy has been much less down in 2020.

It is clear that fiscal stimulus played an important role, but it has not been the only factor in economic growth," said Otar Nadaraia.