Sharp drop in short-term consumer credit lowers growth forecast

Details: Created: 26 January 2016

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

We have recently updated the GDP series (the dependent variable in our model), using the revised GDP growth rates available from Geostat.
Based on the November data, the forecast for GDP growth in the fourth quarter of 2015 now stands at 3.4%. This is 0.1 percentage points lower than in the previous vintage of the forecast.
Annual growth for 2015 is still expected to be 2.9%.
According to the second vintage of the forecast for 2016, the growth rate in the first quarter is predicted to be 3.5%. Once again, this is 0.1 percentage points below our previous prediction. 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.