Georgia’s Economy Keeps Growing
Georgia’s economy grew 7.5 percent in May 2018. The rapid economic growth comes after last year’s impressive 4.5 percent increase considering the economic growth of other states in the region. In Georgia, economic policy frameworks have been strengthened with balanced inflation and well-managed fiscal deficits. After two years of sluggish growth following the 2014 slowdown in the region, growth has picked up and the economic position of Georgia has strengthened.
In 2018, the average estimated real gross domestic product (GDP) growth in Georgia equaled 6.1 percent for the first five months of 2018. The positive tendencies in the economy resulted from the efforts of the government to diversify the market for Georgian goods.
Newly appointed Prime Minister of Georgia Mamuka Bakhtadze launched the New Structure and Program of the Government of Georgia for 2018–2020 to bolster the efforts to create a solid basis for social and economic development of the country with a long-term perspective. Fundamental and innovative reforms in all directions were announced to include speedy economic development, promotion of youth entrepreneurship and innovation, access to welfare, opportunities of economic growth for individual citizens, including the citizens living in the occupied regions of Georgia.
To expand Georgian trade, Georgian authorities have signed a free trade agreement with various states and entities. Today, Georgia enjoys free trade agreement with the People’s Republic of China, Turkey, CIS states, and has a Deep and Comprehensive Area Agreement with the European Union. Most recently, Georgia finalized a Free Trade Agreement with China’s Hong Kong Special Administrative Region (HKSAR). The Deputy Minister of Economy and Sustainable Development of Georgia, Genadi Arveladze, and Secretary for Commerce and Economic Development Edward Yau Tang-Wah signed the document together as part of the Belt and Road Summit in Hong Kong. The agreement was drafted in accordance with the Free Trade Agreement between Georgia and China. Georgia maintains an important role in China’s Belt and Road Initiative serving as a gateway between European and Central Asian markets for both of which Georgia has favorable trade ties.
The promising potential of the Georgian market is recognized by various international financial institutions. In 2018, the World Bank predicted Georgia’s economic growth to hit 4.2 percent while the European Bank for Reconstruction and Development (EBRD) says Georgia’s economy will grow by 4.5 percent. Similarly, the Asian Development Bank (ADB) forecasts the Georgian economy will grow by 4.5 percent in 2018 and the International Monetary Fund (IMF) has moved its forecast up, saying the Georgian economy will grow by 4.5 percent in 2018 and 4.8 percent in 2019.
It is important to recognize the growth trends in Georgia’s economy and its increasingly free and favorable business and investment climate. According to the World Bank, Georgia ranks number 9 in terms of ease of doing business, which is a clear acknowledgement of Georgia’s progress to become a major economic player in the region.
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