Georgia’s growth forecast soars on positive trade, tourism, and remittances data. Inflation and war in Ukraine remain serious sources of risk.

According to the Monetary Policy Report, among the reasons behind the prediction’s upward revision are the high credit activity, and improved external sector due to increased migration to Georgia amid the ongoing war in Ukraine. [...] According to Geostat, the following sectors had the largest positive contribution to the annual real GDP growth in this period: electricity, gas, steam and air conditioning supply (75.9% growth yearly); information and communication (27.7% yearly); administrative and support service activities (24.4% yearly); transportation and storage (18.6% yearly); mining and quarrying (12.6% yearly); education. [...] In July, the number of international visitors increased by 158.9% yearly (decreased by 32.2% compared to the same month in 2019), while the increase in tourist numbers (visitors who spent 24 hours or more in Georgia) amounted to 115.3%. [...] Therefore, a global increase in the price of metal will likely cause improvement to the Georgian economy, whereas an increase in the price of agricultural products will be damaging. [...] On the balance, adding the PMETA and PRAWM indicators to the model thus decrease the growth forecast for both quarters.