Georgia's economy to shrink 5.5% in 2009
TBILISI. Oct 16 (Interfax) - Georgia's economy is expected to shrink 5.5% in 2009 though a possible increase in foreign investment may bring about a 2.0% growth in 2010, the European Bank for Reconstruction and Development said on Friday.
"Georgia's economic growth is expected to remain negative at 5.5 percent in 2009, despite the government's fiscal stimulus aimed at counterbalancing the sharp drop in foreign direct investment and bank lending," EBRD principal economist Anita Taci said in a statement.
"Recovery in 2010 will be slow and depends on the return of foreign private capital and resumption of bank lending, which is constrained by large non-performing loans," Taci said.
Georgia's government initially projected a GDP increase of 2.5% for 2009 but then revised its forecast, first predicting a decrease of 1.5% and today projecting a drop of 4%.
The 2010 draft budget projects a GDP growth of 2%.
In 2010, GDP grew 2.1%.