Georgian economy performed strongly in 2022 as expected adverse impact from Russia’s war in Ukraine did not materialize. War-related immigration, a surge in financial inflows, a rebound in investments and a rise in cargo transit strengthened growth and the GEL. Inflation has remained high despite easing at end-22, reflecting strong domestic demand and increased housing rents, on top of persistent food price pressures. We expect growth momentum to continue and forecast close-to-potential growth at 4.8% in 2023 and 5.0% in 2024.
Key economic themes in 2023
Amid geopolitical tensions, uncertainty surrounding growth outlook remains high. In this report we consider key themes for 2023:
1. 2023 baseline growth forecast and alternative scenarios
2. Inflation and monetary policy rate
3. Exchange rate
4. War-related flows
5. Real estate market
6. Cargo transportation
7. Labor market and wages
8. Debt sustainability in high interest rate environment.
