ADB Updates Georgia's Economic Growth Forecast

The Asian Development Bank (ADB) forecasts a decline in Georgia's economic growth rate to 6% in 2025, the international financial institution said in its April report.

The ADB forecast economic growth will reach 6 percent in 2025 and fall to 5 percent in 2026 due to a decline in the number of Russian migrants and domestic remittances.

“Growth is expected to slow in 2025 and 2026 due to slower expansion in services, while inflation is projected to accelerate slightly due to higher import prices,” the report said.

In 2024, growth in consumption and net exports offset a slight decline in investment, while relatively flat food prices and lower prices for other goods pushed inflation below 2 percent, analysts said.

At the same time, analysts at the Asian Development Bank forecast Georgia's inflation rate to reach 4% in 2025, before declining to the 3% target afterward.

"These forecasts assume no oil price spikes or any supply chain disruptions due to regional conflicts. Money supply growth is projected to slow overall to 13.0% in 2025 and 13.5% in 2026 as credit growth slows," the analysts said.

Inflation could be higher if foreign funding inflows, including development aid, are significantly reduced and lead to a further depreciation of the lari, they said.

“A significant rise in global commodity prices, especially food prices, could trigger higher inflation,” the report said.

Fiscal policy is expected to remain broadly unchanged in the medium term. The budget deficit is projected to increase slightly to 2.5% of GDP in 2025 and 2.6% in 2026, but remain well below 3%.

The Asian Development Bank has supported Georgia since 2007 and is one of its most versatile partners. The total amount of sovereign and non-sovereign loans to Georgia is $3.9 billion.

Promoting inclusive and sustainable economic growth, reducing poverty, expanding regional connectivity, and improving public service delivery in Georgia are the Bank's priorities.

ADB's goal is to contribute to the successful, multilateral, and sustainable development of the Asia-Pacific region. At the same time, it continues to work to eradicate extreme poverty in the region. Founded in 1966, the organization brings together 68 countries, including 49 countries in the Asian region.

Reprinted from https://sputnik-georgia.ru