World Bank: Georgian economy projected to contract by 6% in 2020, before gradual recovery in 2021-2022
The World Bank says that as many as 160,000 Georgians could fall into poverty in 2020 and over 400,000 could suffer downward income mobility. Photo: Nino Alavidze/Agenda.ge.
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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.
In Georgia, the sharp contraction of economic output is showing signs of easing on the back of fiscal support, sustained credit growth, and recovery in remittances. Nevertheless, the economy is projected to contract by 6 percent in 2020, reflecting the strong mobility restrictions at the start of the pandemic, job losses, as well as continued restrictions on international tourism, which contributed around eight per cent of GDP prior to the pandemic", reads the report.
The World Bank says that as many as 160,000 Georgians could fall into poverty in 2020 and over 400,000 could suffer downward income mobility.
Georgia’s efforts to mitigate the economic and social impacts of the COVID-19 crisis have been strong and made possible by prudent economic management prior to the pandemic, but a lot more remains to be done to address the projected widening of the poverty gap," said Sebastian Molineus, World Bank Regional Director for the South Caucasus.
Overall, the report says that emerging and developing economies in the Europe and Central Asia region will likely contract by 4.4 per cent this year, 'the worst recession since the global financial crisis of 2008'.
The pace of recovery depends on the duration of the coronavirus pandemic, the availability and distribution of a vaccine, and the degree of improvement in global trade and investment. As a result, growth in the region could be weaker than expected if the pandemic worsens, says the World Bank.
Georgia is forecast to return to economic growth of 4.5 per cent in 2021 thanks to expected recoveries in tourism, private consumption, investment, and net exports, following a contraction this year due to the coronavirus pandemic, says a new Asian Development Bank (ADB) report, the Asian Development Outlook 2020 Update.
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.
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 Georgian economy is gradually returning to a positive development track, says Georgian Economy Minister Natia Turnava, citing the recent statistics of the external trade of Georgia which shows that in September 2020 the exports of Georgia increased 8.6 per cent compared to the same month of last year.
The International Monetary Fund (IMF) has upgraded its World Economic Outlook which now says that the Georgian economy will grow five per cent in 2021 and the average growth rate will be 5.5 per cent in 2021-2025. The IMF says that the nominal GDP per capita in terms of purchasing power parity will exceed $20,000 for the first time in 2024 in Georgia, and $21,000 by 2025.
The International Monetary Fund (IMF) expects gross domestic product growth to rebound to 4.3 per cent in 2021 'as the effects of the pandemic fade, but considerable downside risks remain', says the IMF staff team led by Mercedes Vera Martin who conducted virtual discussions from October 5 to November 9, 2020, on the seventh review under the Extended Fund Facility (EFF) arrangement.
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.
A year into the coronavirus pandemic Georgians remain concerned about the state of the economy and the impact of Covid-19, reads poll results released today by the National Democratic Institute (NDI or the Institute) and CRRC Georgia.