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Georgia Country Risk Report Q1 2020

Georgia Country Risk Report Q1 2020

We hold a relatively upbeat outlook for the Georgian economy over the next few years.

Real GDP growth looks set to outperform regional peers, due to strong domestic demand, steady inflows of foreign investment and a buoyant tourism sector.

At Fitch Solutions, we have revised up our real GDP growth estimate to 4.9% in 2019, from 4.4% previously. We maintain our 4.7% growth forecast for 2020.

The September 2 resignation of Prime Minister Mamuka Bakhtadze reflects growing pressure on the Georgia's ruling 'Georgian Dream' coalition.

His successor, former interior minister Giorgi Gakharia, will struggle to bolster the flagging popularity of the ruling coalition.

Key Risks

Georgia's current account deficit is among the widest in Europe and will remain a risk for the stability of the economy.

A renewed conflict between Russia and Georgia remains a crucial tail risk, given Georgia's continued attempts at forging closer relations with the EU and the US.

Declining growth in Russia, or even an unexpected downturn, could result in Russian foreign policy becoming more assertive towards Georgia, as has been the case with Ukraine during prior economic crises.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Georgian Economy Set For Steady Growth Over Coming Years
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
10-Year Forecast
The Georgia Economy to 2028
Georgia's Long-Term Growth To Benefit From Continued Reforms And Diversification
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Political Outlook
Domestic Politics
Georgian Dream To Face Further Protests And Poll Struggles
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Pro-Western Path To Continue Despite Mounting Opposition
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.Georgia Country Risk Q1 2020ContentsOperational Risk
TABLE: OPERATIONAL RISK
Economic Openness
TABLE: FREE TRADE AGREEMENTS
TABLE: TARIFF AND NON-TARIFF TRADE BARRIERS
TABLE: FREE TRADE ZONES AND INVESTMENT INCENTIVES
TABLE: BARRIERS TO FDI
Utilities Network
TABLE: ELECTRICITY RISKS
TABLE: FUEL RISKS
TABLE: WATER RISKS
TABLE: TELECOMMUNICATIONS RISKS
Global Macro Outlook
Downside Revisions To Stabilise Somewhat, But Policy Risks Remain
TABLE: GLOBAL MACROECONOMIC FORECASTS (2018-2023)
TABLE: DEVELOPED MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: GEORGIA – MACROECONOMIC DATA & FORECASTS

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