Galt & Taggart predicts Georgian economic growth of between 2.1% and -6% amid coronavirus crisis

Galt&Taggart expects Georgian tourism to see decrease from $1.2 billion to $2.8 billion this year. Photo: Nino Alavidze/, 13 Apr 2020 - 15:55, Tbilisi,Georgia

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.

In the event economic downturn extends from March to May and recovery begins in June, G&T predicts 2.1% growth, and gives the likelihood of this happening a 10% probability.

Should there be recovery in June-September and downturn yet again from October, G&T predicts that growth will equal -2.7%, with a probability of 50%.

Should economic downturn continue on past March, G&T says, with 40% probability, that growth will come out to -6% for the year.

Due to the crisis it expects foreign investments to decrease from $100 million to $400 million, while it discusses possible decline in remittances from $200 million to $300 million.

Galt & Taggart says that Georgian exports may decrease from $200 million to $1 billion this year, while it expects Georgian tourism to see decrease from $1.2 billion to $2.8 billion this year.

Tourism and other service sectors employ half of the workforce, while making up 80% of GDP. Consequently, the crisis will have a greater negative impact on the economy,” writes the research.

Galt & Taggart says that COVID-19 will affect different business sectors with varying severity and timelines. 

Hotels, restaurants, shopping centers, entertainment and transport will likely have already seen an immediate negative effect.

The financial sector, construction, real estate, trade, manufacturing and  education will have a delayed negative effect, while healthcare, pharmacy, e-commerce, agriculture, communications and local tourism may experience positive trends.

Different international organisations have different views and forecasts on the impact of the coronavirus on the Georgian economy.

 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.