As per the Budget Code, following the delivery of macroeconomic forecasts and information concerning basic directions of Georgia's ministries by the government of Georgia to the parliament, the Parliamentary Budget Office (PBO) is publishing its independent forecasts.

Major dynamics of the forecasted variables are as follows:

• The real GDP 2020 growth forecast (4.7%) exceeds the government forecast (4.5%) by 0.2 percentage points (pp) and is lower by 0.5 pp compared to the PBO forecast of June 2019. According to the PBO estimate, the different dynamic from the previous forecast is based on following three factors:The external economic environment did not improve significantly in 2019 and according to the October 2019 World Economic Outlook, the economic growth forecasts for both the world as a whole and the major trading partner countries changed mainly towards decline. In addition given the 'new landing rule for individuals' initiated by the National Bank, which has reduced the growth rate of consumer loans, it is expected that, like 2019, it will have a relatively small but still limited impact on economic activity in 2020. Also, in response to the exchange rate depreciation and high inflation, the National Bank increased the monetary policy rate by 2 percentage points in the second half of 2019 and announced the continuation of this policy in case of high inflation. It should be noted that the PBO medium run forecast (5.2%) takes into account a planned/expected major increase in government capital expenditures (non-financial assets), the factual dynamics of which might have an impact on realization of PBO forecasts
• According to PBO forecast, in 2019 the consolidated budget net lending/borrowing (GFSM 2001) ratio to GDP will be equal to -1.6%. This differs by 0.8 pp from the net lending/borrowing given in BDD (-2.4%), which is caused by differences in forecasts of consolidated budget revenues and GDP. It should be stressed, as noted above, with respect to consolidated budget expenditures, that PBO forecasts treat the BDD medium run fiscal forecasts as the baseline scenario.
• According to PBO forecast, the expected current account deficit amounts to 4.3% of GDP in 2020, while the government forecast equals 4.1%. The PBO estimates that the current account balance will deteriorate slightly over the medium-term and will be around -6% of GDP on average, while the government forecasts that the deficit will continue to decline.

For more details about updated forecasts of other economic variables, see the full document.