Page 5 - GEORptDec21

1.0 Executive summary
Georgia’s economy remained steady at 6.9% in October, at the same level as in September, according to the preliminary data released by the statistics office Geostat. For the first 10 months of the year, Geostat estimates an average growth rate 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.
Global ratings agency Moody's Investors Service expects the Georgian economy to grow by 7.3% in 2021, following a 6.2% contraction in 2020, underpinned by fiscal policy support to consumption in 2021 and signs of steady rebound in regional tourism. Moody's expected growth to be at a potential 4-5% in the next few years, driven by increased investment in productivity-enhancing infrastructure in agriculture and manufacturing.
The International Monetary Fund (IMF) projects the Georgian economy to grow 7.7% in 2021 and 5.8% in 2022, reads the latest WEO report, titled World Economic Outlook: Recovery During a Pandemic.
With these indicators, Georgia will have one of the highest economic growth rates in the region of the Middle East and Central Asia.
The Fund expects the economic rebound to help the government bring public debt down from over 60% of GDP to 55.3% of GDP at the end of the year, compared to a slight deterioration (60.8% of GDP) envisaged under the previous forecast in April.
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 (to 9.9% of GDP) compared to its elevated 2020 level, according to the IMF.
The recovery in tourism strengthened in October 2021, with tourist arrivals (overnight stays) recovering to 313% more than in October 2020 but 69% less than in October 2019. Notably, tourism revenues in October saw a 73% jump y/y.
Significant downside risks remain and contribute to an outlook that is more uncertain than usual, the Fund acknowledged, urging Georgia to increase its coronavirus vaccination rate.
Georgian health officials are alarmed and concerned by the recent low vaccination rate that would lead to a high number of deaths when the new wave of the virus started. According to data from Worldometer, Georgia ranks 13th worldwide in COVID-19 deaths per million over the past week with 62/mn, behind only Armenia, Romania, Bulgaria and a handful of Caribbean nations. Beginning on December 1, Georgian citizens and visitors will require a
5 GEORGIA Country Report December 2021 www.intellinews.com