TBC Capital will review Georgia's economic growth forecast for 2021 - TBC Chief Economist Otar Nadaria stated in the program "Analytics". He said that if they had expected 5.5% economic growth this year, they would revise their forecast given the record high growth of 44.8% in April.
A few days ago it became known that the Georgian government will change the target of economic growth this year and it will be 6.5% instead of 4.3%. In addition, the budget is planned to be adjusted taking into account the higher-than-expected economic activity.
As TBC chief economist explains, according to their baseline forecast, the size of the Georgian economy this year would slightly exceed the 2019 rate, although the fact that the size of the Georgian economy in April 2021 exceeded the 2019 rate by 21% was "difficult to imagine."
"We had a recent forecast of 5.5% growth in 2021. This figure will now increase even more. Economic growth this year will definitely be in the range of 6% -7%.
As for 44.8% economic growth, although the base effect was high, we exceeded the 2019 level by about 21% in real terms - this was hard to imagine.
Our initial forecast, which was 5.5%, took into account that it would exceed the 2019 GDP level. Today tourism is less than in 2019, but exports and remittances have increased. Domestic demand has increased at the expense of both fiscal stimulus and bank lending. The exaggeration is much bigger than expected, however, I think it is better not to go any further than this as it is still preliminary data to be clarified by Geostat. More information will be available at the sector level as well as at the pricing level, ”Otar Nadaraia explained.
