Page 14 - GEORptNov20

Georgia’s GDP contracts 12.3% y/y in Q2
The country’s GDP decreased by 5.6% y/y on average in January-August, compared to 5.8% in January-July.
Georgia’s GDP contracted by a real 12.3% y/y in Q2, while in nominal terms it reached Georgian lari (GEL) 11.21bn ($3.6bn), according to the first detailed quarterly data released by statistics office Geostat.
The country’s economy thus posted a modest 2.2% y/y advance in Q1 but suffered a 5.8% y/y contraction in H1.
The most marked decline in Q2 was in hotel/restaurant/café (HoReCa), which declined some 40% y/y. Most sectors posted negative performances, but agriculture (4.7% y/y), mining (6.4% y/y), healthcare and social (14.3% y/y) and education (11.7% y/y) were in positive territory.
The largest shares of GDP by activity were taken by trade (14.6%), real estate activities (12.7%) and agriculture, forestry and fishing (10.2%), followed by manufacturing (9.9%), construction (6.8%), transportation and storage (6.1%) and education (5.6%).
3.2 ​Macro outlook
IMF forecasts 5% GDP decline in Georgia before full recovery in 2021
The Georgian economy is set to shrink by 5% in 2020 while its growth in 2021 will be quite robust with 5% in the other direction, allowing for almost a complete recovery, according to the updated World Economic Outlook (WEO) from the the International Monetary Fund (IMF).
In April, the Fund projected a 4% GDP contraction for the country’s economy in 2020, followed by a 3% recovery in 2021.
The World Bank, for comparison, envisages a 6% GDP contraction for Georgia in 2020. It expects a 4% recovery in 2021.
The IMF forecast for 2022 is even more optimistic than its 2021 outlook. It sees 6% growth.
According to the available data, the Georgian economy shrank by 5.6% in the first eight months of 2020, so in order for the IMF forecast to be correct, the recession in the last quarter of the year should not stretch to a contraction of more than 4%.
14​ GEORGIA Country Report ​November 2020 ​ ​www.intellinews.com