Policy Briefs

A novel hybrid forecasting model for Georgian GDP
Wednesday, 10 April, 2024

Following the collapse of the Soviet Union, Georgia faced significant economic challenges, including political instability and conflicts. This resulted in a severe economic recession in the 1990s, with GDP contracting sharply. In the early 2000s, Georgia began implementing economic reforms aimed at liberalizing the economy, improving governance, and attracting foreign investment. These reforms laid the foundation for future growth. During this period, Georgia experienced robust economic growth, with GDP expanding at relatively high rates (averaging 9.7% annual growth between 2003 and 2007), driven by reforms, foreign investment, and improvements in infrastructure and governance.

However, the global financial crisis of 2008-2009 significantly affected Georgia's economy, leading to a slowdown in growth (average growth dropped to -0.6%). However, the country quickly recovered, and GDP growth resumed, though at a more moderate pace (4.8% average yearly growth) compared to the mid-2000s. Throughout the 2010s, Georgia continued to implement reforms to enhance its business environment, attract foreign investment, and diversify its economy beyond traditional sectors like agriculture.