Page 16 - GEORptApr21

3.1 Macroeconomic overview
Georgia’s GDP shrinks 6.2% in 2020 after second lockdown in Q4
Georgia’s GDP contracted by 6.8% y/y in Q4, a quarter in which the country's economy was hit by the second lockdown that continued into the first quarter of 2021. The blow suffered at the end of the year resulted in a full-year economic decline of 6.2%, slightly steeper than the 6.1% previously estimated, according to preliminary quarterly data issued by the statistics office Geostat.
The economy has not experienced such a sharp decline since 1994. Even the August 2008 war with Russia had a milder impact compared to the economic shock of COVID-19 and the two subsequent lockdowns.
In absolute terms, the country’s GDP reached Georgian lari (GEL) 49.4bn, or $15.89bn, down from $17.5bn in 2019.
For the whole year, the largest drop in turnover was recorded in the hotels and restaurants sector. The size of the sector decreased by 37.9%. Transportation and storage plunged by 22.3%. The decreases were 5.6% in trade and 4.7% in construction.
Some sectors still produced positive real growth rates: health and social work activities (+7.9%), agriculture, forestry and fishing (+3.6%), education (+3.1%), public administration and defence; and compulsory social security (+1.8+).
Georgia’s GDP contracted by 11.5% y/y in January 2021, deepening from 7.9% in December 2020, according to a flash estimate from Geostat. The lockdown has been gradually lifted through the first quarter of the year but economic growth has probably remained deep in negative territory.
Growth rates would be seen to improve in the months starting from February on low base effects and as the government lifted restrictions, TBC Capital said in a note.
TBC analysts also said that due to seasonally weak activity, January GDP
16 GEORGIA Country Report April 2021 www.intellinews.com