Different prognosis for Georgian GDP

The IMF’s prognosis is that Georgian GDP growth in 2009 could be less then 1%, Edward Gardner, the IMF Permanent Representative in Georgia, has said. This would be a deviation from the recent trend. For several years Georgian GDP has been increasing. In 2008 it was over GEL 19 billion, 2% higher than the previous year, although this was its weakest increase. In 2005 GDP growth was 9.6%, in 2006 9.4% and in 2007 12.3%.

The 2009 state budget projects a GDP growth of 2.5% and official representatives challenge the IMF prognosis. They insist that by the end of 2009 Georgia’s GDP growth will be between 2 and 3%. State officials say that Georgia is in privileged conditions as it will be receiving considerable sums in aid from donor countries and organizations. However receiving this the money increases Georgia’s foreign debt, which in turn negatively influences the balance between GDP and foreign debt.

Georgia’s foreign debt has increased by 50% in just one year. According to official figures it is now almost USD 3 billion, being around 25-26% of GDP. This is an alarming tendency.