According to the Parliamentary Budget Office forecast, the Georgian economy will increase by 6.7% in 2022. The real GDP growth forecast (6.7%) in 2022 is 0.7 percentage points (pp) higher compared to the government forecast (6.0%) and differs (1.1 pp higher) from the PBO forecast published in December 2021. After a significant decline in economic growth in 2020 (-6.8%), high economic growth was observed in 2021 (10.4%), mainly driven by the base effect of a high reduction in 2020 caused by the COVID-19 pandemic and due to the significantly better development trend for that period. It should be noted that despite the ongoing Russia-Ukraine war, the economic growth rate that began in 2021 was maintained in the first quarter of 2022 in terms of foreign trade, as well as remittances, foreign direct investment, financial sector, tourism and other economic indicators. The mentioned forecast of the PBO incorporates the assumption that the high economic growth trends observed after the coronavirus pandemic will continue this year as well as in the medium term, tourism indicators will increase more, foreign trade and other economic indicators will be maintained at a significant level. The assumption also takes into account domestic economic activity, as well as - preliminary estimates and forecasts of the economic growth of Georgia's major trading partner countries. Specifically:

• It is likely that the tourism sector will revive significantly in 2022 compared to 2021, and both exports and imports of services will increase.
• In response to the rising inflation, the National Bank has raised the monetary policy rate since February 2022 which from the beginning of February comprised 10.5% and from the end of March – 11%. On May 11, 2022 the Monetary Policy Committee of the National Bank of Georgia decided to leave the monetary policy rate unchanged at 11%. According to the PBO forecast, inflation will start to decline from the second half of 2022, but approach the target (3%) at the end of 2023, which could lead to a reduction in the policy rate from the same period.

According to the forecast of the Parliamentary Budget Office, the expected ratio of the net lending/borrowing balance of the consolidated budget (GFSM 2014) to GDP is -4.0% by 2022 (according to the December 2021 forecast it was -4.7%). This figure is higher than the corresponding figure presented by the government (-3.5%), mainly due to the different projections of the tax revenues of the consolidated budget, as well as the GDP forecast. It should be highlighted that, for consolidated budget expenditures, the PBO forecasts are based on the medium-term fiscal plan defined by the government's Basic Data and Directions Document.

According to the PBO, the expected current account deficit for 2022 is 8.5% of GDP, which differs from the PBO’s forecast of December 2021 (8.2%) by 0.4 pp, while the government’s forecast is 8.2% of GDP. The PBO estimates that the current account balance will continue improving and at 2023-2026 will be formed around -5.2% of GDP on average. According to the government forecast, the deficit will continue improving and be around -4.9% of GDP on average for the 2023-2026 period.