Galt&Taggart economist Lasha Kavtaradze talks about the positive and negative factors that will affect Georgia’s GDP growth this year. He spoke about the issue on the air of TV-program "Business Morning".
Low incomes form remittances, withdrawal of migrants’ deposits, reduction of real-estate market and slowdown in GDP growth of Georgia’s trading partners - these are the main issues that economists identify as the main threats to the country's economy.
"We must take into account that the effect of migration has been solid in the Georgian economy in 2022, and the risks that we have in the negative scenario can come from it. We have identified four risks, one is that there will be very low income from remittances, the effect of tourism will fade faster and there will also be a significant slowdown, if both of these components are implemented simultaneously, the negative impact on economic growth will be 1 percentage point. The second risk is the migrants’ deposits placed in the banking system, which can be withdrawn at once, this is also perceived as a risk - to economic growth. Its impact will be 0.2 percentage points, the third risk is the reduction of the real estate market to the level that was in the pre-war period, and in this case slowdown will be about 0.75 percentage points. The fourth risk we identified has the greatest negative impact, which is a slowdown in GDP growth in our trading partners, and this slowdown means that inflows will decrease significantly. The impact of this will be 1.6 percentage points. If the risks coincide, then in the negative scenario, the growth will drop from 4.8% to 1.2%", said Lasha Kavtaradze.
