Macroeconomic Forecast Georgia

October 2007 | Macroeconomic Forecasts

We have revised upward our 2007 Georgian economic growth forecast to 9.8%, in line with strong first quarter real GDP expansion of 11.4% y-o-y and robust foreign capital inflows driving an investment boom. Indeed, net FDI over the first two quarters of the year totalled a record US$642.7mn, a 44.7% increase over the same period a year earlier. Our upward revision coincides with an increase in the Georgian government's economic growth forecasts to 12% in 2007 and 10.0% in 2008. While we agree with Tbilisi's positive expectations, we caution that rising inflation is likely to negatively affect real growth rates

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