TBC Capital predicts 4.5 - 5.5 per cent drop in Georgian economy this year
However, the bank predicts 5-6 per cent economic growth by 2021. Photo: Nino Alavidze/Agenda.ge.
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TBC Capital, Georgia’s brokerage, advisory and investment bank, predicts the Georgian economy will shrink 4.5 - 5.5 per cent this year in its report about the coronavirus’ impact on Georgia.
However, the bank predicts 5-6 per cent economic growth by 2021.
The forecast for 2020 tourist inflows and FDIs has deteriorated, although expectations of foreign trade and remittances have improved, says TBC Capital.
The investment bank says that a sharp depreciation of the Georgian currency is unlikely and by the end of the year the lari will stabilize at 3.0.
As for inflation, the bank expects it to fall to 4.5 by the end of this year, while it expects the refinancing rate to fall to 7.75 per cent by that time.
TBC Capital, the investment arm of TBC Bank, is a wholly-owned investment banking subsidiary and licensed brokerage firm established in 1999.
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.
The real gross domestic product (GDP) will decline in 2020 in Georgia and is estimated to be -4.8 per cent, with projected recovery of growth at 4 per cent in 2021, reads the World Bank’s recent report Global Economic Prospects 2020.
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.
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 Georgian economy is projected to contract by six per cent in 2020, while in 2021 economic growth is forecast to reach four per cent, says the latest edition of the World Bank’s Economic Update for the region, released today.