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After relatively high GDP growth in February and March, the Georgian economy slowed down considerably in April. According to Geostat’s rapid estimates, GDP grew by only 0.9% annually in the reporting month. Consequently, in the first four months of 2015 the Georgian economy expanded by 2.6%. ISET’s GDP forecast for the second quarter of 2015 is 5.1%, which seems to be rather overoptimistic given the grim start of the quarter.
The IMF’s estimated GDP growth for 2015 stands at about 2%; however, risks of downward pressure have recently increased. Moreover, the Business Confidence Index (BCI), ISET-PI’s quarterly publication reporting business’ expectations, hit its historical minimum in the second quarter of 2015. Meanwhile, the Consumer Confidence Index (CCI), another ISET-PI publication, has remained at its minimum level for four consecutive months.
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According to Geostat’s rapid estimates, Georgia’s economy grew by 4.3% in March 2015. After the slowdown of the last several months, the growth rate in February and March looks very promising. In the first quarter of 2015, GDP growth amounted to 3.2%. In March, VAT payers’ turnover increased by 9.9% annually, and the total consumption of electricity increased by 6.2%. ISET’s GDP forecast for the second quarter of 2015 is even more optimistic, at 5.1%.
Despite the depreciation of the lari and pressure on inflationary expectations, annual CPI inflation reached just 2.5% in April. The increase in prices was driven to a large extent by food and non-alcoholic beverages (2.7%), healthcare (6.4%), alcoholic beverages and tobacco (11%). The prices of alcoholic beverages and tobacco rose because excise tax on some of the products included in this category was increased. Taken together, these three categories contributed over 2 percentage points to the CPI inflation rate.
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