Economic growth in Georgia is expected to improve to 3.4 per cent in 2016, – says the EBRD’s latest Regional Economic Prospects report.
“Growth in Georgia is expected to improve to 3.4 per cent in 2016, compared with 2.8 per cent in 2015. While the external environment remains challenging, with remittances and exports negatively affected by recession in Russia and a sharp slowdown in regional trading partners, the country is likely to enjoy a strong tourism season – helped by constraints on other tourism destinations, such as Turkey – and increased investor confidence supported by the business-friendly policies of the government and the National Bank of Georgia.watch full The Gracefield Incident 2017 movie
Trust in the Lari and in Central Bank policies is also increasing. This factor can also be expected to reduce dollarization in the economy, which currently stands at 68 per cent on the deposit side and 66 per cent on the loan side. Following a 21 per cent decline of the Lari in 2015, which given the high level of dollarization is increasingly affecting NPLs, the current account deficit can be expected to stabilise and dollarization to start gradually declining in 2016.
This will reduce downward pressure on the Lari. In 2017, growth is expected to increase further to 3.9 per cent, supported by an increasing impact of the Deep and Comprehensive Free Trade Area (DCFTA) implementation and increased competitiveness, as well as strong domestic and foreign direct investment in infrastructure and other sectors”, says the report.
