December 16, 2016 / 10:06 PM / a year ago

Georgia cuts 2016 growth forecast to 2.7 pct from 3 pct

TBILISI, Dec 17 (Reuters) - Georgia’s parliament cut its economic growth forecast for 2016 to 2.7 percent from 3 percent in a budget amendment late on Friday, highlighting the impact of falling exports and an expanding current account deficit.

Growth has been slowing in the former Soviet republic, slipping to 1.3 percent year-on-year in October from 1.5 percent in September. The economy has been hit by a plunge in the Russian rouble and by a drop in remittances from overseas.

Exports fell 5 percent year-on-year to $1.920 billion in the January-November period, while the current account deficit expanded by 44 percent to $6.991 billion.

Georgia, which is crisscrossed by pipelines taking Caspian oil and gas from Azerbaijan to Europe, saw its economy grow 2.5 percent in the first 10 months of the year compared with the same period last year.

The country’s new forecast matches that of the International Monetary Fund, which has cut its projection from an earlier 3.4 percent.

In the amended budget, revenues will be reduced to 8.546 billion lari ($3.201 billion) from 8.555 billion, while spending will be raised to 8.671 billion lari from 8.543 billion. ($1=2.67 lari) (Reporting by Margarita Antidze; Editing by Alison Williams)

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