Page 14 - GEORptDec21

Georgia revises 2020 GDP contraction from 6.2% to 6.8%
of 10.5%.
The government drafted the 2021 budget on assumptions of 10% growth, while it projected 6% GDP growth for 2022.
TBC Capital revised upwards in early November its forecast for this year’s GDP growth in Georgia from 10.5% projected under its summer forecast to 11-11.5%. The figure looks now on the optimistic side, particularly given the new COVID-19 restrictions likely to impact the winter tourism season in the country. For 2022, TBC expects 6% growth.
The latest growth data released by Geostat indicate that the growth had already eased in September-October to a slower rate compared to the previous two quarters, when the country’s economy was still in a recovery stage after the shock experienced in 2020.
In October, the estimated real growth compared to the same period of the previous year was observed in most of the economic sectors: manufacturing, transportation and storage, arts, entertainment and recreation, utilities, financial and insurance activities, HoReCa and trade.
A decline was registered in construction.
Georgia’s GDP contracted by 6.8% in real terms compared to the 6.2% previously announced, according to the revised estimates published by the statistics office Geostat.
At current prices, the country’s GDP amounted to GEL49.27bn ($15.84bn). The steepest decline was, as expected, seen in the accommodation industry: 45% y/y.
However, the impact of the lockdown and the subsequent collapse of tourism was more systemic, since the sector of accommodation accounted for only 4.5% of Georgia's GDP in 2019, before the crisis. Even so, the 45% contraction of this sector made a significant contribution of over 2pp to the 6.8% GDP drop in 2020.
The sector of arts, entertainment and recreation (another 3.1% of GDP in 2019) contracted by 18.4% in 2020, in terms of value-added. Manufacturing contracted as well, by 7.1% y/y, but there were sectors that maintained a positive dynamics: mining (+12.4% y/y), information and communications (+2.6%) and the public sector (public administration, education and health care).
14 GEORGIA Country Report December 2021 www.intellinews.com