Depositors’ Inflation Hedging Puts Downward Pressure on Growth Forecast

Details: Created: 09 December 2015

ISET-PI has updated its forecast for Georgia’s real GDP growth rates using the September 2015 releases of various economic indicators.

Geostat has released its preliminary estimates of GDP growth for the third quarter. The estimated Q3 growth is 2.5%, only 0.1 percentage point below the ISET-PI forecasted value.
The forecast for GDP gorwth in the fourth quarter now stands at 3.6%.
Based on the latest update, the annual growth for 2015 is expected to be 2.9%.
According to an early forecast for 2016, the growth rate in the first quarter of next year is expected to be 2.8%. Download the full report

GDP Forecast Methodology

The Georgian Index of Leading Economic Indicators provides current-quarter and one-quarter-ahead GDP forecasts for those who need to make business and policy decisions and cannot wait until the official statistics are announced several months later. According to methodology, our forecast is similar to those conducted by leading research institutes around the world. In particular, ISET-PI adapted the methodology that was originally developed by the New Economic School to forecast GDP for the Russian Federation. We would like to acknowledge the help of Prof. Konstantin Styrin (NES) who agreed to share his MATLAB code with ISET-PI, and the assistance of Dr. Andrei Sarychev in modifying and adapting the code for Georgia‘s needs.