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After the reaching negative growth in June 2013 the y-o-y growth of real GDP started to improve slowly and already in November, 2013 the growth rate catch up its previous 2011-2012 higher numbers. According to the GeoStat primary estimations, average growth rate of previous three month (November, December 2013 and January 2014) is approximately 8.1% (see Chart 1).
Does the high numbers of growth translate into stable growth in the future?
One of the corner point of the higher growth is how fast it will trickle down to society. According to the Consumer Confidence Index (CCI), worked out by ISET-PI, despite the higher growth started from the November, 2013 the overall CCI started deteriorating significantly (see Chart 2). Download the full report
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2013 was a challenging period for Georgia. Elections, political and policy instability contributed to the significant slowdown in economic growth. Apart from the internal factors, external factors also contributed to the slowdown. According to the International Monetary Fund (IMF) data, world economic growth has decreased from 3.2% to 2.9% and IMF forecasts that the world will catch higher growth rates in the following years.
Looking into what happened to the neighboring economies in 2013 (the reference group is typically the CIS countries, although Georgia is not officially a member of the Commonwealth, but shares many social and economic characteristics with the countries in this group) we find that growth of the CIS region decreased from 3.4% to 2.5% (see Chart 1), and, according to the IMF experts, low external demand and low investment were among the main reasons behind the slowdown. Download the full report
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