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GDP Growth in 2018 Exceeded Initial Forecast

According to preliminary indicators, real growth in GDP in 2018, as compared to 2017, made up 4.7%, while the deflator changed by 3.6%. 2018 GDP volume in current prices constituted 41,077.5 million GEL, up 8.5% year on year.

As for specific fields in the total GDP structure, trading and industry sectors rank first with 17% each. Transport and communications come second, with 10.2%. The housing sector ranks third, with 9.3%, state governance is fourth at 8.2%, agriculture and fishing sectors rank fifth with a 7.7% ratio, the real estate sector and leasing ranks sixth with 7.4%, healthcare and social assistance sector rank 7th with 5.8%.

It is worth noting that in 2018, all economic sectors grew, excluding one field – the housing sector. An upturn was recorded in the following fields: finance sector (13.5%), utility, social and personal services (+13.2%), real estate operations, leading and consumer services (12.1%), hotels and restaurants (9.7%), transport (9.4%), mining industry (7.6%), healthcare and social assistance (6.2%), trading, vehicles, household appliances and things of personal use (5.9%), communications (+5.8%)> Contraction was recorded in the housing sector (-3.1%).

It should be noted that, at the beginning of 2018, the government of Georgia forecast a 4.5% economic upturn, while the IMF prognosis made up 4.2%, and the World Bank forecast 4%. A major success was recorded in May 2018, when economic growth made up 7.5%. This is one of the major indicators over the past years.

As to the previous years, in 2017, the Georgian economy grew by 5%. In 2016, the economic upturn was at  2.8%. Starting in 2019, Georgia’s averaged economic growth was at 6.1%; however, starting in 2013, the pace of growth declined, and constituted 3.3%, instead of the planned 6%. In 2010, 2011 and 2012, GDP growth pace was at 6.21%, 7.2% and 6.4%, respectively, but in the following period, growth almost halved, and the monthly pace was below 7% until May 2018.

For example, in 2013 Georgian economy grew by 3.4%, 2014 – (+4.6%), 2015 – (+2.9%), 2016 – (+2.8%), 2017 – (+5%).

By Merab Janiashvili
Economic Analyst
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