Georgia's Trade Balance Impacts Public Budget Deficit, Study Finds
The article explores the connection between a country's trade balance and budget balance, focusing on Georgia from 2000 to 2019. By analyzing factors like exchange rates and domestic consumption, the researchers found that an increase in the exchange rate leads to more imports, while higher domestic consumption also boosts imports. On the other hand, a stronger exchange rate decreases exports, but better economic performance in trade partners increases exports. Overall, the study suggests that understanding these relationships can help predict how a country's budget and trade balances are affected by various economic factors.