Georgia’s real GDP grew 7.2% year-on-year in July after 6.2% growth in June, according to preliminary data released by the state statistics office, Geostat, on Friday.

Economy grew 6.2% y/y in the first seven months of 2014, according to Geostat.

Real GDP growth in the second quarter was 5.1% after 7.1% growth in the first quarter, according to preliminary data.

Last week Moody's Investors Service upgraded outlook on Georgia’s sovereign rating from stable to positive and affirmed Ba3 rating, three notches below investment grade.

“The key driver of… outlook change is the entering into force in September 2014 of Georgia's Deep and Comprehensive Free Trade Area (DCFTA) with the EU, which Moody's expects will attract further foreign direct investment (FDI) and bolster the country's export performance. This should in turn support an improvement in Georgia's external position over the medium term,” the rating agency said on August 22.

“The affirmation of the Ba3 rating reflects the combination of external vulnerability and geopolitical risks in the near term, as well as the volatile nature of the Georgian economy,” it said.

Fitch ratings agency said on June 30 that signing of the Association Agreement, also including deep and comprehensive free trade area, with the EU will be “a positive long-term development” for Georgia's sovereign credit profile, but “it does not have an immediate impact on our ratings assessment, which remains focused on the nearer-term prospects for external finances and economic growth.”

Fitch affirmed in May Georgia's sovereign rating 'BB-', also three notches short of investment grade, with stable outlook. Fitch plans its next scheduled review on Georgia in October.