Slower Economic Growth In The Medium-Term

While we expect the Georgian economy to recover somewhat during the final quarter of 2008 (following Q3's 3.9% y-o-y contraction), we caution that growth will not surpass 2007's peak of 12.3% in the foreseeable future. To be sure, we expect the legacy of the Russo-Georgian August war, the slowdown in global growth and the continued instability in financial markets to weigh on the Georgian economy through end-2010.

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