World Bank: Georgian economy projected to contract by 6% in 2020, before gradual recovery in 2021-2022

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.