Resume: The International Monetary Fund publishes economic growth forecasts for different countries. Georgia’s estimated economic growth rate for 2020 is 5%. Politicians or civil society representatives often emphasise the need for a high, in particular, double-digit economic growth for Georgia’s development and poverty reduction. In response, authorities point out the difficult economic and political situation in the region and add that Georgia has comparatively high economic growth.
The Minister of Finance does not specify those countries which he believes constitute Georgia’s region. At first, it is appropriate to clearly define the region where Georgia belongs and this is relevant in terms of comparison. In accordance with the World Bank methodology, the group of Europe and Central Asia countries is such a region. In this region, the estimated average economic growth rate is 3.5% and the estimated economic growth rate in Georgia’s immediate neighbour countries is 3%. It is unclear upon what base the Minister of Finance claims the estimated regional economic growth rate to be 0.1%. However, in the end, according to last year’s performance and the estimated figures in terms of economic growth, Georgia can possibly be considered as a successful country both in the region and among the neighbour countries.
Analysis
On 30 September 2019, at the session of the Government of Georgia, the Minister of Finance, Ivane Machavariani, stated the following in regard to the 2020 estimated economic growth rate (52:30): “When the regional growth rate is 0.1%, a 5% economic growth rate is a very ambitious statement.”
The International Monetary Fund publishes economic growth forecasts for different countries. Table 1 shows Georgia’s estimated economic growth rate in this and the upcoming years.
Table 1: Georgia’s Estimated Economic Growth Rate in 2019-2024 (%)
Source: International Monetary Fund
Politicians or civil society representatives often emphasise the need of a high, in particular, double-digit economic growth for Georgia’s development and poverty reduction. In response, authorities point out the difficult economic and political situation in the region and add that Georgia has comparatively high economic growth figures.
The Minister of Finance does not specify those countries which he believes constitute Georgia’s region. At first, it is appropriate to clearly define the region where Georgia belongs and this is relevant in terms of comparison. In accordance with the World Bank methodology, the group of Europe and Central Asia countries is such a region.
Graph 2: Estimated Average Economic Growth Rate in the Region in 2019-2023 (%)
Source: World Bank, International Monetary Fund
The average estimated economic growth rate in the aforementioned region is 3.5% whilst Russia has the lowest estimated growth rate (1.7%) for 2020. Of note is that the estimated economic growth rate in Georgia’s neighbour countries will be 3%. It is unclear upon what base the Minister of Finance claims 0.1% to be the estimated economic growth rate for the region. However, in the end, according to last year’s performance and the estimated figures in terms of economic growth, Georgia can possibly be considered as a successful country both in the region and among the neighbour countries.
