Research

Research

Georgia Macroeconomic Review. February 2016

The Georgian economy started 2016 sluggishly and with above-target inflation, a direct result of shocks imported from regional economies. While the regional jitters are negatively affecting headline macro numbers, the economy has proven resilient and has absorbed the shocks at a reasonable cost. GDP growth may even accelerate marginally in 2016 yoy and inflation will return to near the NBG's 5% target, even though a near-term acceleration to 7-8% is likely in 1Q16. The Lari seems to have weakened sufficiently to eliminate the external accounts gap, and we see the exchange rate at GEL 2.5-2.6/USD through end-2016.

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