World Bank predicts Georgian economic growth to be close to 0% in 2020 amid coronavirus outbreak
The World Bank is allocating about $160 billion to support developing countries amid the coronavirus pandemic over the next 15 months. Photo: Nino Alavidze/Agenda.ge.
Tweet 
Share
The World Bank projects Georgian economic growth to slow sharply this year, coming close to zero percent in 2020 due to the challenging external environment and impacts of the COVID-19 pandemic.
However, the COVID-19 impacts on the Georgian economy “will be partly cushioned by a fiscal stimulus of around two percent of GDP, containing acceleration of capital spending, tax deferrals, accelerated VAT refunds and sector support for the most affected businesses, as well as higher social spending,” says the international financial institution in its Spring 2020 Economic Update for the Europe and Central Asia region.
The World Bank forecasts Georgian fiscal deficit (a shortfall in a government's income compared with its spending) to be around 5.2 per cent of the gross domestic product (GDP) in 2020.
The Georgian economy will be severely impacted, as transport restrictions affect the travel and tourism sectors, while containment measures dampen domestic demand," says the World Bank.
The World Bank projects economic growth in the Europe and Central Asia region to fall into a recession in 2020 decreasing to between -4.4 and -2.8 per cent before rebounding in 2021.
The World Bank remains a strong and committed partner to Georgia, and we will support the government’s health, social protection and economic recovery responses, all of which are essential to mitigating the impacts of the pandemic on the people of Georgia,” says Sebastian Molineus, the World Bank Regional Director for the South Caucasus.
Georgian Prime Minister Giorgi Gakharia noted that the government is working to mitigate the damage caused by the virus.
We are making changes to the budget - the government is already working on a plan to emerge from these conditions of the national curfew and the state of emergency...this plan should have a balance between the protection of citizens’ health and the potential of economic development. It cannot be done in one day or in one week,” said Gakharia.
The World Bank is allocating about $160 billion to support developing countries amid the coronavirus pandemic over the next 15 months.
Despite a state of emergency, economic activity continues in Georgia except for Marneuli and Bolnisi municipalities in eastern Georgia where a strict quarantine regime has been imposed after a local, 62-year-old woman tested positive for COVID-19 came into contact with more than 80 locals.
Companies involved in Georgia's private sector will contribute to efforts against the new coronavirus outbreak, with the government providing a platform for pooling the joint resources.
The impact of the coronavirus is rippling through the Georgian economy, but it might take a few months to fully see the fallout in data that track economic performance in Georgia.
Georgian economic growth may drop to between 0.8 and 3.9 per cent this year, reports the ISET Policy Institute (ISET-PI), one of the first university-based think tanks in the South Caucasus based at the International School of Economics at Tbilisi State University (ISET).
Georgia has confirmed four new cases of coronavirus increasing the total number of cases to 218. The medical director of Tbilisi Infectious Disease Hospital Marina Ezugbaia told journalists today that all of these new cases have been “imported”.
Georgian officials have thanked representatives of international financial organisations and diplomatic corps for their recent open letter to the Georgian government and Georgian people, praising the country's resilience amid the coronavirus pandemic.
Four more individuals have recovered from COVID-19 in Georgia increasing the total number of recoveries to 67. As of now, there are a total of 257 confirmed cases of the virus in the country, including three deaths.185 infected individuals remain in various hospitals
Georgian economic growth may drop to between -6 per cent to 2.1 per cent this year due to the new coronavirus crisis, says Galt & Taggart, depending how the crisis plays out. Galt & Taggart gives three possible scenarios (optimistic, mild and pessimistic), according to which Georgian economic growth could differ based on the length of the crisis.
The Georgian Producers' Federation, Georgian Distributors Business Association, the Taxpayers' Union of Georgia, Georgian Employers Association and EU-Georgia Business Council have released a joint statement today in which they present a list of recommendations to the Georgian government to help businesses during the coronavirus pandemic.
The International Monetary Fund (IMF) and the World Bank forecast Georgian economic growth to be three-four per cent by 2021, said Georgian Finance Minister Ivane Matchavariani.
The European Bank for Reconstruction and Development (EBRD) forecasts Georgian economic growth to fall 5.5 per cent in 2020 mainly as a result of a reduction in the country’s tourism sector due to coronavirus restrictions on travelling.
A total of 1,000 villages in Georgia will receive better internet connectivity as the World Bank’s Board of Executive Directors has approved €35.7 million to support the country’s digital transformation. The project aims to connect people, enterprises and institutions across rural Georgia to high-quality, affordable broadband internet and promote the use of digital services.
The European Bank for Reconstruction and Development has released its 2020-2021 transition report in which the IFI assesses Georgia’s economic situation amid the pandemic, forecasting 3.5 per cent growth for 2021.
The World Bank’s data show that Georgian GDP will have decreased by six per cent in 2020, whereas the bank forecasts the Georgian economy to grow by four per cent in 2021 and by six per cent in 2022.