EBRD cuts economic growth forecast for Georgia’s economy from 3 to 2%

The European Bank for Reconstruction and Development (EBRD) has cut economic growth forecast for Georgia’s economy in 2013 from 3 to 2%. As the EBRD "Region's economic prospects” says, GDP growth will be reduced from 5% to 4 % next year as well. The inflation rate will reach 0 %.

EBRD explains that Georgia’s economic growth was hindered  by the reduction in private and public investment  as well as by political instability which is associated by the political transformation after the parliamentary and the presidential elections.

"The reduction of costs by the  government  and private investors restrained actions contributed to the recession in the construction and industrial sectors while encourage agriculture and trade. After Russia allowed  Georgian products back into its market, economic growth is expected to accelerate in 2014, taking into account that after the presidential elections there will not be a political uncertainty and trade relations with Russia will also improve,"– the EBRD survey reads.

The whole Eastern Europe and the Caucasus region deserved pessimistic assessment of the international experts. EBRD estimates that the region's economy will grow, on average, by 1% instead of 3 %. Consequently, Ukraine and Belarus have the lowest rate (0.5 % ) -  ( 0.5 % ), followed by Georgia (2 %), Armenia (2.5 %), Moldova (3.5%), Azerbaijan (4.5 %). Russia's economy will grow by 1.3 % in 2013 and Turkey’s – by 3.7%.

Adapted from Commersant