International Monetary Fund projects Georgian economy to grow 7.7% in 2021

The International Monetary Fund (IMF) projects the Georgian economy to grow 7.7% in 2021, 'a significant upgrade from just a few months ago, which implies that output will exceed its 2019 level this year', reads a concluding statement of the IMF staff at the end of an official visit in Georgia.

The IMF statement reads that the Covid-19 crisis took a heavy toll on the Georgian economy, but the recovery 'has recently gained impressive momentum'. 

Monthly estimates suggest a strong rebound in the second quarter of 2021 with growth now expected to reach 7.7% for the year. Robust growth in remittances and exports, and early signs of a faster than expected rebound in tourism have supported the recovery and should contribute to a narrowing of the current account deficit compared to its elevated 2020 level", says the IMF.

However, the IMF adds that high inflation is expected through the end of the year, before declining rapidly in 2022.

Also the IMF statement mentions that 'significant downside risks remain and contribute to an outlook that is more uncertain than usual'. 

The authorities have made commendable progress in securing vaccine supplies, but more will be needed, and vaccinations have to accelerate substantially to ensure that more than half of the population is vaccinated by the end of the year. New Covid-19 variants or vaccination delays could derail the recovery by requiring new lockdowns and reducing external demand, underscoring the paramount importance of controlling the pandemic", reads the statement.

Georgian Prime Minister Irakli Garibashvili responded to the IMF's recent forecast for the Georgian economy and said that the IMF revised 2021 growth outlook from 3.5% to 7.7%.

We must do everything we can to maintain this positive, strong pace", said Garibashvili at today's government meeting.

He added that according to the preliminary data the economic growth reached about 15%-18% in June and 'in the end, it turns out that our country's economy will grow by about 12% in the first six months of 2021'.

Garibashvili once again called on the local population to get vaccination against the Covid-19, concerning the rising number of coronavirus cases registered in the country. He said that 'our economy can no longer withstand the closure'. 

Georgian Economy Minister Natia Turnava said that the revised outlook of the IMF ‘enabled us to increase the current budget by more than a billion lari, which is an additional resource for our various programmes, social spending and infrastructure projects’.