Growth Disappoints in the Fourth Quarter of 2016

Details: Created: 20 January 2017

ISET-PI has updated its forecast of Georgia’s real GDP growth rate for the fourth quarter of 2016 (the final update) and the first quarter of 2017. Here are the highlights of this month’s release:

• Geostat has published its rapid estimate of real GDP growth for the fourth quarter of 2016. The estimated growth stands at 1.2%, which is 1.7% lower than the value forecasted in the last update of our model.

• Given the latest data, Georgian real GDP growth in 2016 is estimated as having been 2.2% (0.5 percentage points lower than projected by our model).

• ISET-PI’s forecast for the first quarter of 2017 puts GDP growth at 3.5%.

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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.