What’s happening in the Georgian economy during the coronavirus crisis?

  • The economic team of Georgia is working on an economic plan to enable the government to provide as much assistance as possible to citizens who have lost their sources of income due to the state of emergency. Photo: Nino Alavidze/Agenda.ge.

Agenda.ge, 24 Mar 2020 - 16:40, Tbilisi,Georgia

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 economic team of Georgia is working on an economic plan to enable the government of Georgia to provide as much assistance as possible to citizens who have lost their sources of income due to the state of emergency as well as to support Georgian businesses in overcoming the crisis created by the coronavirus spread. 

The government's economic team is cooperating with major international financial institutions to develop another support package for the economy, including in terms of mobilising additional material resources.

Georgian Economy Minister Natia Turnava stated that there are two types of regimes in Georgia - one is a strict quarantine in Marneuli and Bolnisi and the lighter regime in the rest of Georgia. 

Currently, we have two types of regimes in Georgia. One is a strict quarantine, which is enforced in the Marneuli and Bolnisi municipalities and the lighter regime in the rest of Georgia. I would like to reiterate - not in Marneuli and Bolnisi municipalities, but in the rest of Georgia, economic activity continues with no restrictions on businesses, various services, infrastructure projects, construction and many other economic activities. It is just important to follow the rules dictated by epidemiologists", Turnava said.

What economic activities are restricted or allowed in Georgia during the state of emergency?

Prime Minister's spokesperson Irakli Chikovani explained today what economic activities are restricted or allowed in Georgia during a state of emergency. 

He said that the implementation of major infrastructure projects will not be hindered in the country. The suspension of activities will not concern the retail sale of food, animal feed, animal and plant products, household chemistry and hygiene, veterinary preparations, pesticides and agrochemicals, seed and planting materials; supply of electrical communication, electricity, natural gas, water, gasoline, diesel; sale of medical goods and pharmaceuticals.

Chikovani said that the restrictions also do not apply to press booths. He also added that restaurants and public food facilities will be able to continue their activities only in case of introducing food delivery service.

Chikovani also named places where gathering of more than 10 people is restricted, such as:

  • Medical institutions
  • Public institutions
  • Defence forces
  • Penitentiary institutions

Coronavirus impact on the Georgian National currency, the lari 

Economic Minister Turnava spoke about the depreciation of the Georgian national currency, the lari. She said that in the global crisis the Lari followed the dynamic of the depreciation of other countries' currencies.

"There is a global economic crisis and coronavirus is a global challenge. This situation has hit the economy. National currencies of our neighbouring countries and many other countries have been depreciating. It would be wrong and irresponsible to claim that we will be able to counter this world trend. The only thing we can do is to mitigate the impact of the lari depreciation", Turnava said.

The National Bank of Georgia (NBG) announced today that it will sell $40 million at foreign exchange auction tomorrow to control the national currency’s changing value against the US dollar. As a result of the last two interventions the NBG has already sold $60 million in total.

The NBG stated that when the shock is over the Georgian economy will be able to recover quickly. 

As of today, 1 USD costs 3.2389 GEL, while 1 EUR costs 3.4578 GEL.

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