Georgia's economic growth rate accelerated from 2.1% y/y in April to 5.3% in May, according to a report by statistics agency Geostat.

The small and trade-reliant economy in the South Caucasus has seen a slowdown in economic growth in recent years, following the similar trend experienced by its main trade partners – neighbours Turkey, Azerbaijan and, to a smaller extent, Armenia and Russia. However, following GDP growth of 2.9% in 2015 and 2.2% in 2016, the Georgian economy is expected to grow by 4% in 2017 according to the government's projections.

In its Rapid Estimations of Economic Growth report, Geostat noted that the average GDP growth for the first five months of the year stood at 4.5%. It also noted that the consumer price inflation (CPI) had accelerated to 6.6% y/y in May, up from 6.1% a month earlier, and the producer price inflation to 9.4% y/y.

Meanwhile, exports in the first five months of the year grew by 28.7% y/y to $1bn, while imports by a lower 10.8% y/y to $2.9bn.

In a separate report on July 3, Geostat noted that annual CPI further increased to 7.1% in June due to increases in the prices of food, alcoholic beverages and tobacco and transport.

Georgia's CPI evolution reflects the chequered performance of the Georgian lari. The currency steeply depreciated over 2014-2015, stabilised across the first three quarters of 2016 and then depreciated abnormally quickly – by 19% – in the last two months of the year.