EBRD forecasts Georgian economic growth to fall 5.5% in 2020
“Loss of tourism receipts will be a significant blow to the Georgian economy,” says the report. Photo: Nino Alavidze/Agenda.ge.
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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.
With tourism receipts normally amounting to nearly one-fifth of GDP, the negative impact will be widespread across many sectors. We expect the economy to shrink by 5.5 per cent in 2020 before recovering by 5.5 per cent in 2021,” says the report.
The report notes that the hospitality sector will be severely hit due to travel bans amid coronavirus fears.
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As for other countries in the South Caucasus, Azerbaijan and Armenia, the EBRD has cut economic growth saying that the Armenian economy will shrink by 3.5 per cent while the Azerbaijani economy will contract 3 per cent in 2020. The EBRD forecasts an economic rebound of 5.5 per cent in Armenia and recovery of 3 per cent in Azerbaijan by 2021.
The EBRD says that Georgian economic growth amounted to 5.1 per cent in 2019. It notes that Georgia had a record number of international visitors last year (7.7 million, of which 5 million were tourists who stayed overnight).
Meanwhile, the International Monetary Fund (IMF) says that economic growth in Georgia will reach 3 per cent in 2021, while it will be reduced by 4 per cent in 2020.
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.