EBRD projects 3.5% growth for 2021 in Georgia in new report
The bank however projects a 5 per cent contraction in GDP for 2020. Photo: Nino Alavidze/Agenda.ge.
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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 bank however projects a 5 per cent contraction in GDP for 2020.
The Covid-19 pandemic is particularly disruptive for the small and open Georgian economy, says the report.
The impact of the external pandemic shock was wide-ranging, hitting export of goods, tourism and remittances, all very important pillars of the Georgian economy. Strict virus containment measures, imposed in March 2020, hit domestic demand and many small service providers,” the EBRD notes.
The hospitality sector, the main driver of robust economic growth in recent years, has become a key source of vulnerability during the Covid-19 pandemic,” the EBRD says, ascribing much of the dip in GDP due to the collapse of the hospitality sector.
An increase in government expenditures combined with weaker economic activity led to a sharp rise in the budget deficit, and the loss of tourism revenues has resulted in a widening of the current account deficit, says the institution adding that augmentation of the Extended Fund Facility programme with the IMF secured finances of more than US$ 400 million for 2020-21.
The EBRD says that the economic recovery depends on the rebound of tourism.
The speed of recovery and overall economic health in 2021 will be dictated by the developments in the hospitality sector and the inflow of foreign visitors, both of which are highly uncertain at present,” the report reads.
The EBRD also says that the government prepared a comprehensive package of measures to support the economy amid the pandemic and it notes that the NBG has strengthened its regulatory power.
In a series of moves in the past year the NBG amended regulations on consumer lending to give more discretionary power to the banks and enhanced its transparency and communication,” says the EBRD.
What are the key priorities for 2021?
As for key priorities for 2021, the international financial organization says that the authorities should strengthen the resilience of the economy through diversification which is they should support the export of information technologies services and benefit from the expected post-Covid-19 shifts in global supply chains.
The institution also notes that the governance standards need to remain high on the reform agenda as well as it says that the human capital development through investments in education would help improve the overall productivity of the economy.
Estimated real gross domestic product (GDP) declined by 0.7 per cent in September 2020 year-on-year and by five per cent in the first nine months of 2020 year-on-year, show the latest data from the National Statistics Office of Georgia (Geostat).
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.
The International Monetary Fund (IMF) is offering $450 million to help Georgia contain the COVID-19 pandemic and limit its economic impact, announces the IMF. The IMF reached an agreement with the Georgian authorities for the completion of the Sixth Review and an augmentation of access under the Extended Fund Facility.
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. It also forecasts Georgian fiscal deficit (a shortfall in a government's income compared with its spending) to be around 5.2 per cent of the gross domestic product (GDP) in 2020.
The real growth of gross domestic product (GDP) in Georgia amounted to 5 per cent in 2019, says the final results of the National Statistics Office of Georgia, noting that GDP at current prices amounted to 49.25 billion GEL ($14.95 bln/€12.64 bln) which is a 10.4 per cent increase year-on-year.
Estimated real gross domestic product (GDP) declined by 3.9 per cent in October 2020 year-on-year, and by 5.1 per cent in the first ten months of 2020, show the latest data from the National Statistics Office of Georgia (Geostat).
Nominal gross domestic product (GDP) amounted to 13.33 billion GEL in the third quarter of 2020 in Georgia, while real GDP declined by 5.6 per cent year-on-year and the GDP deflator increased by 5.9 per cent in the reporting period, show preliminary data from the National Statistics Office of Georgia.
Estimated real gross domestic product (GDP) declined by 7.7 per cent in November 2020 year-on-year, and by 5.9 per cent in the first eleven months of 2020, show the latest data from the National Statistics Office of Georgia.
Georgian Prime Minister Irakli Garibashvili has held an official meeting with the president of the European Bank for Reconstruction and Development (EBRD) Odile Renaud-Basso, during his visit to Glasgow for the UN Summit, where the importance of political stability in Georgia was emphasised following the municipal election run-offs.
The European Bank for Reconstruction and Development will finance the largest healthcare provider in the country - Georgia Healthcare Group - with $40 million, of which $15 million will be allocated to JSC Evex Hospitals, the EBRD announced on Wednesday.