Georgian economists expect country's GDP growth to slow to 3.6% in 2025

TBILISI. Jan 17 (Interfax) - Georgia's economic growth will slow to 3.6% in 2025 from an estimated 8.5% in 2024, while inflation will grow to 4.6% from 1.9% last year, according to a consensus forecast from Georgian economists prepared each quarter by the international consulting company PMCG (Policy and Management Consulting Group, U.S.).

Around 60 Georgian economists take part in the consensus forecast.

Overall, the economists evaluated Georgia's economic situation negatively. "Their forecast was generally much more pessimistic compared to the previous reporting period," it said.

In particular, over the next six months compared to the corresponding period of the previous year, economists expect the Georgian lari to weaken against the U.S. dollar, the euro and the Turkish lira, while strengthening against the Russian ruble. A decline in both exports and imports is also expected.

"According to the surveyed economists, political upheavals and exchange rate fluctuations had the greatest impact on Georgia's economy in the fourth quarter of 2024. Political instability and fluctuations in the exchange rate are expected to be the most significant factors influencing Georgia's economic growth in 2025, while imported inflation and regional conflicts are expected to have a comparatively lesser impact," PMCG said.

In addition, the suspension of negotiations on EU membership was negatively assessed by all surveyed economists in terms of its impact on Georgia's economy. They also expect it to have a negative effect on international aid and the inflow of foreign direct investment.

Regarding the condition of the National Bank of Georgia's foreign currency reserves, survey participants assessed them as "marginally adequate" for absorbing domestic shocks. However, a significant number of respondents considered the reserves insufficient to withstand broader regional and global shocks.

According to the official forecast of the Georgian authorities, the country's GDP is expected to grow at least 6% in 2025, while inflation will decline to 1%. The authorities estimate that economic growth was no less than 9.5% in 2024.

According to the IMF forecast, Georgia's GDP growth will slow to 6% in 2025. The World Bank expects growth of 5.2%, the UN forecasts 5.4%, the European Commission - 5.8%, the European Bank for Reconstruction and Development - 4.6%, the Asian Development Bank - 5.5% and the ratings agency Fitch - 5.3%.

The country's economic growth was 7.8% in 2023 and 10.4% in 2022.