Public investment programs aimed at modernizing and developing the country's infrastructure, such as the deep-water port on the Black Sea coast (construction due to start during 2017), is expected to sustain growth. Activity in the construction, transport and communications sectors is expected to be particularly dynamic. Private investors are likely to be encouraged by the gradual opportunities offered under the implementation of the Association Agreements (AA) and the Deep and Comprehensive Free Trade Area Agreement (DCFTA) concluded in 2014 with the EU. The result of the parliamentary elections in late 2016, which gave a clear majority to the prime minister's party, could further boost business and household confidence. Private consumption should also benefit from the steady reduction in unemployment (12% in 2015 against 15% in 2012), a slight increase in growth in Russia, from where almost 60% (10% of GDP) of expatriate remittances originate, and price rises which should remain moderate. Inflation - very weak in 2016 - could edge up in 2017, fueled by rising domestic demand and oil prices trending upwards. However, it is expected to stay within the central bank target (4%).

Despite efforts to control public spending under an agreement concluded with the IMF in July 2014, this will continue to rise: investment projects remain a priority (it being specified that they are financed in part by multilateral loans) and the 2017 draft budget includes wage increases in some sectors (education). Reform of the taxation of profits, applicable in January 2017 (only distributed profits will be taxed), is likely to reduce government income. Measures which could be decided on in the framework of technical assistance provided by the IMF from May 2017, are not likely to be effective before the end of 2017. The budget deficit is therefore expected to widen. The rise in public debt, 80% denominated in foreign currency, could be mitigated by a more positive trend for the exchange rate of the lari, whose depreciation in 2015 caused that debt to rise sharply. The current account deficit is not likely to narrow significantly in 2017. The price of products sold abroad (copper, alloys, but also agrifood products like mineral water and wine) is unlikely to move much. Meanwhile, the outlook for growth in the country's main trading partners - the EU (30% of exports in 2015) and the CIS (40% of the total, in particular Azerbaijan with 11% of the total) - remains modest. At the same time, the upturn in Georgian household consumption, even moderate, is expected to lead to higher imports, although the energy bill is unlikely to fall in the absence of another drop in oil prices. Oil transit revenues and a possible increase in tourism revenues could, however, prevent the balance from deteriorating again. Despite the high current account deficit, downward pressure on the lari's exchange rate could be mitigated by investment flows. The strongly dollarized banking sector (around 65% of deposits and loans are denominated in USD) will benefit from this relative stability in the exchange rate.

Tensions persist in the regions which unilaterally declared their independence (Abkhazia and South Ossetiea), supported by Russia. At national level, the "Georgian Dream" coalition (RG), the party of President Giorgi Margvelashvili elected in 2013, won the October 2016 parliamentary elections thus strengthening his majority (115 seats out of 150) against the United National Movement Party (MNU) of former President Mikheil Saakashvili (27 seats). After a period of great instability, these results could help improve the political environment, which would favor progress on reforms. The risk of power being concentrated within a single party, in which former Prime Minister Ivanishvili remains very influential, without an opposition sufficiently organized to hold it to account, may raise fears of a lack of transparency in the country's management. The powers of the parliament could moreover be increased, if the proposal for amendment of the constitution announced by the RG were adopted, providing, in particular for the nomination by the Assembly of the president, currently elected by universal suffrage. Georgia is one of the best-ranked CIS countries on governance. Having made steady progress, it has shown a tendency to deteriorate on some World Bank indicators, especially regarding the fight against corruption (58th in 2015 against 52nd in 2014) and government effectiveness (69th against 60th).