Georgia GDP Growth Lowered

The International Monetary Fund forecasts Georgia’s gross domestic product will grow 2.7% in 2016 and by 4% in 2017, the IMF said on Thursday.

The IMF had earlier predicted 3.4% growth in Georgia in 2016 and 5.2% in 2017, although its representative told Reuters earlier this month that its forecasts could be downgraded.

“The Georgian economy has shown resilience and continues to recover from the external shock, although at a slower pace than initially envisaged,” the IMF said in a statement after the fund’s mission visit to the country.

The ex-Soviet republic’s economy, which has suffered from falling exports and remittances and a plunge in the Russian ruble, expanded by 2.6% in the first nine months of the year, compared with the same period in 2015.

The IMF said that the Georgian authorities planned a comprehensive package of structural reforms, including those to mobilize domestic savings, diversify the economy and expand the use of the lari national currency in the economy.

“The authorities also aim to put in place an ambitious infrastructure program to promote trade and tourism while preserving medium-term fiscal sustainability,” the fund said.

“In addition, exchange rate and financial policies will continue to focus on maintaining a flexible exchange rate and preserving a sound financial system, enhancing the resilience of the economy to external shocks.”

The IMF projects average inflation in Georgia at 2% in 2016 and 3% in 2017.

The government targets annual inflation at 5% in 2016. Inflation was at minus 0.2% year-on-year in October, down from 5.8% the same month a year ago.