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February is usually a good time to take stock of the country’s economic performance, because at the beginning of the month statistical agencies release data on many baseline indicators for the previous year. Preliminary data reveals that the annual GDP growth rate in 2014 was 4.7%, which fell short of the 5% that had been expected. This shortfall was driven by weak performance, growth of just 1.6%, in the last quarter of 2014 (see Chart 1).
This outcome is hardly surprising. As we mentioned in earlier reports, Q4 2013 was marked by growth and Q4 2014 is thus being compared to a relatively high base. However, looking at Chart 2, it is evident that the low growth rate of Q4 was reflective of the generally sluggish trend of growth in 2014. Download the full report
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According to Geostat’s rapid growth estimates, Georgia’s real GDP declined by 0.5% in November 2014 (Chart 1). Despite this, growth in the first eleven months of 2014 was a robust 5%, which is certainly a much better result than most countries in the region could boast. The ISET fourth quarter GDP forecast predicts 3.9% growth in the last three months of 2014.
Consistent with the decline of growth in November, the change in VAT payers’ turnover slowed to 2.7% (Chart 2).
The slowdown of the economy was further reflected in the Consumer Confidence Index (CCI). In November, the CCI decreased to -18% and in December it reached its historical minimum of -23%. The deterioration of consumer confidence was mainly driven by the sharp depreciation of the lari, which once again stoked inflation fears among Georgian consumers. Download the full report
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