TBILISI: Georgia's gross domestic product may grow 2 percent this year, the International Monetary Fund said on Wednesday, but threats to the forecast exist.
In February, Georgia's Economy Ministry said that it may halve its growth forecast for this year to 2.0-2.5 percent. The former Soviet republic is suffering from spillover effects from the weakening Russian rouble.
The IMF also said in a press statement that inflation is likely to pick up in coming months towards this year's target of 5 percent and that the Fund supports the central bank's policy of refraining from currency interventions and letting the Georgian currency, the lari, float.
"Because of depreciation, inflation will likely pick up somewhat in coming months, towards the National Bank of Georgia's inflation target of 5 percent," Mark Griffiths, the IMF mission chief to Georgia, said at a press conference.
Georgia is to discuss with the IMF whether it can ask international financial institutions or foreign banks for more financial aid for infrastructure projects.
The IMF said in its statement that the country, where remittances from abroad, including Russia, constitute about 12 percent of the country's GDP, is "well positioned" to overcome it current economic challenges.
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