GDP Forcast

Details: Created: 08 May 2015

ISET PI has updated the forecasts for Georgia’s real GDP growth rates using the January 2014 releases of various economic indicators.

• The growth forecast for the 1st quarter of 2014 has been revised downward from 3.6% to 0.5%.
• The growth forecast for the 2nd quarter of 2014 has been targeted at low 1.6%.
• Meanwhile, Geostat has updated GDP growth estimate for January 2015 and similarly to our forecast it stand at 0.5%.
• From the beginning of last year, we started drawing conclusions about the annual growth rate for the ongoing year (see our January 2014 and February 2014 publications for a note on methodology). Based on this month’s data, we expect annual growth in 2015 to be 0.7% in the worst-case or “no growth” scenario, and 1.8% in the best-case or “average long term growth” scenario.

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Details: Created: 08 February 2015

With the release of the December data, the year of 2014 is now “officially” over. ISET-PI has updated its forecast for Georgia’s real GDP growth rate for the first quarter of 2015; meanwhile, official rapid estimates of both fourth quarter and annual growth rates for 2014 became available from Geostat. Here are the highlights of this month’s releases:

• Geostat’s official rapid growth estimate for the last quarter of 2014 is 1.6%, while annual growth stands at 4.7%
• ISET-PI’s forecast for the first quarter of 2015 stands at 3.6%, which is just 0.1 points below the previous month’s forecast.
• From the beginning of last year, we started drawing conclusions about the annual growth rate for the ongoing year (see our January 2014 and February 2014 publications for a note on methodology). Based on this month’s data, we expect annual growth in 2015 to be 3.2% in the worst-case or “no growth” scenario, and 5.4% in the best-case or “average long term growth” scenario. Download the full report

Details: Created: 08 January 2015

ISET-PI has updated its forecasts for Georgia’s real GDP growth rates using the November 2014 releases of various economic indicators.

• Based on the November data, the growth forecast for the last quarter of 2014 was revised upward from 3.6% to 3.9%.
• The second forecast for the first quarter of 2015 increased from the initial 3.2% to 3.7%.
• For the first time since June 2013, Geostat’s “rapid estimate” of monthly growth is negative, with GDP growth for November estimated at -0.5%.
• We started drawing conclusions about the annual growth rate for 2014 at the beginning of the year. Using official Geostat quarterly growth estimates (when available), we arrive at a 5.4% GDP growth forecast for 2014. If we instead use the predictions generated by our model, namely the 5th vintages of growth forecasts for each quarter, then the annual growth prediction for 2014 falls to 5.1%. At the same time, the Georgian government’s official forecast is 5% economic growth for 2014. Download the full report

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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.