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Apr 10, 2019
IMF reconfirms Georgia’s trend growth rate at 5.2%
- According to the IMF’s April 2019 World Economic Outlook, global economy is expected to grow by 3.3% in 2019 and 3.6% in 2020. 2019 projection was revised downwards by 0.3PP compared to October 2018 WEO one. As for the outlook in 2020, it remained unchanged. The escalation of US–China trade tensions, macroeconomic stress in Argentina and Turkey, disruptions to the auto sector in Germany, tighter credit policies in China and Brexit related uncertainties combined with monetary policy normalization in larger advanced economies have negatively contributed to global growth in the second half of 2018 and will still have an effect in the first half of 2019. At the same time, more dovish stance of leading central banks, fiscal and monetary stimulus in China and some progress in US-China trade negotiations should contribute to stronger growth going forward.
- As a result of more dovish monetary policy, emerging markets have experienced a resumption in portfolio flows, a decline in sovereign borrowing costs, and a strengthening of their currencies relative to the dollar.
- IMF projects Georgia’s growth at 4.6% for 2019 and at 5.0% for 2020. Thereafter, the economy is expected to expand at 5.2%.
- Turkey faced the largest downward revision. IMF currently expects 2.5% contraction in 2019 before recovering at 2.5% in 2020. In 2021-2024 years growth in Turkey is expected to stand at 3.2%. Needed policy tightening to reduce financial and macroeconomic imbalances is expected to continue in early 2019 before a recovery takes place from the second half of the year.
- Growth was also revised downwards for Russia, Armenia and Azerbaijan. The expectations remained unchanged for Uzbekistan with 5% in 2019, 5.5% in 2020 and an impressive 6% over 2021-2024.