"The expected growth of GDP in the second quarter of 2023 is due to the maintenance of the improved economic situation that started the previous year. Although the base effect of economic growth in the second quarter of 2022 was high (the economy grew by 7.2% in the second quarter of 2022), the economic situation continues to improve.
It should be noted that the high growth rate of the economy was maintained in the 1st quarter of 2023. In particular, according to the preliminary data of the National Statistics Office of Georgia, the average real growth in the 1st quarter of 2023 was determined by 7.2%, which coincides with the forecast of the first quarter of the Parliamentary Budget Office.
The Budget Office's economic growth forecast for the second quarter of 2023 is based on the assumptions that compared to the second quarter of 2022:
The volume of tourism will increase by about 1.8 times (about 1.2 times less than the pre-pandemic rate of the second quarter of 2019). At the same time, the number of visitors leaving the country will also rise.
Along with significant growth in tourism exports, domestic tourism activity will continue to be maintained.
The volume of both private consumption and investments will increase, which leads to the growth of total consumption and investments and the mentioned positive rate of economic activity.
A significant increase in trade in goods is also expected. As government investment activities increase, along with increased consumption and private investment, the amount of goods imported is expected to grow significantly.
Against the backdrop of the recovery of the global economy, it is expected that the demand for exports will increase and, accordingly, the volume of exports of goods will also grow.
As a result of the quantitative assessment of the mentioned assumptions, it is expected that in the second quarter of 2023, the volume of imports will increase more than exports, and the net export component will determine the change in economic activity by -0.2% point, while the sum of consumption and investments will increase significantly and the GDP change will be determined by 6.6% points. According to the budget office, in the assessment of the economic growth of the first quarter of 2023, the net export was determined by 0.1% point, and the component of absorption costing was determined by 7.1% point," - the Parliamentary Budget Office noted.