Reopening of the economy and continued robust growth of exports and remittances fueled strong growth in Georgia. In Aril 2021, real GDP growth was 44.8% y/y based on Geostat’s flash estimates, beating market expectations (monthly growth estimates are subject to revisions and quarterly growth figures are more precise). Notably, the part of this growth is explained by last year’s low base (economy contracted by 16.6% y/y in April 2020), though growth is higher by 20.8% compared to April 2019 level. Overall, in 4M21, real GDP growth was 8.1% y/y after a 4.2% contraction in 1Q21 (with January-February in red and positive growth in March). Growth rebound is in line with ongoing economic recovery in Georgia’s trading partners, which we expected to continue and we now project growth at 7.0% in 2021, up from our previous forecast of 5.0% (which was our baseline forecast and in pessimistic scenario we expected growth at 3.6%).
