Page 17 - GEORptJun20

The second upcoming operation will help the government cover the unanticipated financing gap and ensure Georgia’s progress in implementing reforms in areas critical for inclusive economic growth. The third operation is intended to support the jobs agenda as well as micro, small and medium sized enterprises (MSMEs) that have been affected by the pandemic.
In addition the World Bank has said it will support digital connectivity and infrastructure through the upcoming “Log-In Georgia” project. It will back the government’s plan to connect more than 700 villages to the internet via fibre-optic cable networks. This will boost remote learning and overall connectivity essential for livelihoods hampered by pandemic-required social distancing, the World Bank said.
3.2 ​Macro outlook
EBRD slashes 2020 GDP forecast for Georgia by 10pp amid tourism standstill
Georgia’s economy appears on course to contract by 5.5% this year given the impact of the coronavirus, according to the latest Regional Economic Prospects report of the European Bank for Reconstruction and Development (EBRD), released early on May 13.
The EBRD expects a rebound of the same magnitude, 5.5%, in 2021.
In its previous forecast, issued last November, the development bank foresaw a GDP expansion of 4.5% for Georgia in 2020.
Loss of tourism receipts caused by constraints of the coronavirus (COVID-19) crisis will be a major blow to the country’s economy. With tourism receipts normally amounting to nearly one-fifth of its GDP, the negative impact will be widespread across many sectors, the report read.
In addition, an expected drop in remittances will likely further suppress household disposable income. The World Bank has said that global remittances are projected to decline sharply by around 20% in 2020 due to the economic crisis induced by the COVID-19 pandemic and shutdown. Remittances to Georgia were nearly 12% of GDP in 2018, according to latest data from the World Bank.
The EBRD explained that its baseline scenario assumes a gradual relaxation of domestic measures to contain the coronavirus and a return to normality during the second half of the year. Its projections were subject to
17​ GEORGIA Country Report ​June 2020 ​ ​www.intellinews.com