World Bank lowers Georgian economic growth forecast

The World Bank has lowered Georgia's GDP growth forecast for 2023 from 5.5 per cent to 4 per cent.

This is stated in the World Bank report "Prospects for the World Economy", Caliber.Az reports with reference to the Georgian media.

In 2024, the World Bank expects Georgia's GDP to grow by 5 per cent.

The World Bank report noted that inflationary pressure decreased in the second half of 2022, despite the fact that it remained at a high level – 9.8 per cent year-on-year in December. Inflation is expected to gradually decrease while maintaining tight monetary policy.

"From this point of view, the risks are mostly balanced. On the other hand, constant inflation combined with the tightening of global financial conditions may affect the lari exchange rate and, possibly, macro-financial stability due to the high level of dollarisation," the report says.

According to the bank, tourism and money transfers in Georgia may be negatively affected by the significant economic downturn expected in Russia in 2023, as a result of the protracted war and sanctions.

The World Bank considers the inflow of cash flows for a longer period than expected to be a positive prospect, and Georgia will benefit from the reconfiguration of the transport corridor as a result of the creation of a new trade orientation.

The National Bank of Georgia has a similar forecast of economic growth in 2023.

According to the baseline scenario of the National Bank, the growth of the Georgian economy will slow down in 2023 and will be at the level of the period before the coronavirus pandemic of 4 per cent. According to the regulator, the current projected economic growth of 10 per cent in 2022 is mainly due to the flow of foreign visitors and their growing spending, as well as the high rate of lending.