"In May 2021, inflation in the country reached 7.7%, which is caused by the depreciation of the GEL exchange rate since last year. Due to high inflation, the National Bank of Georgia increased the refinancing rate from 8% in February to 9.5% in May.
According to our forecast, in 2021 Georgia's GDP will increase by 4.5%, and in 2022 an increase of 5.5% is expected. The recovery of the tourism sector is currently the main driver of economic activity growth. "At the same time, there is a significant risk in the country due to the low rate of vaccination of the population," the review said.
The EBRD's growth forecast for economic growth is in line with the World Bank's decision to raise Georgia's economic growth forecast to 6% on June 9, before the forecast stood at 4.3% growth.
As for the EBRD forecast for the countries of the region, it is distributed as follows:
• Russia - 3.3% growth is expected in 2021, an improvement of 0.3% compared to the previous forecast;
• Azerbaijan - 2% growth is expected in 2021, deterioration by 0.5% compared to the previous forecast;
• Armenia - 4% growth is expected in 2021, a change of 0% from the previous forecast;
• Turkey is projected to grow by 5.5% in 2021, improving by 0.5% compared to the previous forecast;
• Ukraine - 3.5% growth is expected in 2021, an improvement of 0.5% compared to the previous forecast.
• Azerbaijan - 2% growth is expected in 2021, deterioration by 0.5% compared to the previous forecast;
• Armenia - 4% growth is expected in 2021, a change of 0% from the previous forecast;
• Turkey is projected to grow by 5.5% in 2021, improving by 0.5% compared to the previous forecast;
• Ukraine - 3.5% growth is expected in 2021, an improvement of 0.5% compared to the previous forecast.
The forecast for economic growth in 2021 has also been raised by the Georgian government, which expects 6.5% economic growth in the country.
