Q1’15 GDP Growth 3.2% – Preliminary Data

Georgia’s real GDP grew 3.2% in the first three months of 2015, compared to the same period of last year, according to preliminary data released by the state statistics office, Geostat, on April 30.

Economic growth was 4.3% year-on-year in March after 4.9% y/y growth in February and 0.5% y/y growth in January, according to the preliminary data.

Government announced in February about intention to revise downward its economic growth forecast for 2015 from 5% to 2%, but state budget parameters still remain set at 5% growth outlook.

Economy is likely to be one of the key issues on which incumbent PM Irakli Garibashvili will face grilling from opposition lawmakers when he appears before the Parliament as his government requires confidence vote after resignations of several ministers.

In mid-April Fitch ratings agency revised Georgia’s outlook down from ‘positive’ to ‘stable’ and affirmed country’s sovereign rating ‘BB-‘, three notches short of investment grade. The ratings agency said that multiple external shocks following downturn in Russia had “a highly adverse impact” on Georgia with falling exports and remittances and depreciation of the national currency lari.

Lari lost 31.6% of its value against U.S. dollar since early November, when it started depreciation. Exports from Georgia declined by 27.7% in the first quarter of 2015 compared to the same period of last year to USD 502.9 million and remittances were down by 22.8% year-on-year to USD 249.6 million in the first quarter.

PM Garibashvili told journalists on April 28 that depreciation of lari is caused by external factors and despite of difficult situation in the region, Georgia’s economy continues to grow. He said that Georgia’s economic growth in the first quarter of 2015 was “exceptional” compared to other countries in the region. Garibashvili also said that it was it was a result of “efficient” work of government.

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