Page 6 - GEORptJun20

lari (GEL) 3.5bn ($1.1bn, equivalent to 7% of GDP) anti-crisis plan to mitigate the economic and social effects of the coronavirus (COVID-19) outbreak. ​The 7%-of-GDP plan entails a social assistance package for individuals, as well as a fiscal stimulus in the form of tax relief and exemptions for businesses over the course of the following six months.
Georgian think tank PMC Georgia Research has estimated in ​a report​ that the country’s GDP will drop by 8% this year under a baseline (“least pessimistic”) scenario, while it would plunge by 12.9% under the “pessimistic” scenario. Weaker tourism and remittances are two drivers hitting the country’s economy. ​In March, compared to March 2019, the number of tourists coming to Georgia decreased by 56.1%, while remittance inflows dropped by 9%. Further declines in these figures are expected in the coming months.
The EBRD slashed the 2020 GDP forecast for Georgia by 10pp amid tourism standstill,​ according to its latest Regional Economic Prospects report released on May 13. ​Export volume dropped by 11.9% y/y to $1.0bn in January to April, according to national statistics office Geostat.
Annual inflation in Georgia rose in April to 6.9% on higher food prices, thus returning to a point near the highest level (7% y/y) seen in the last two years. ​The country’s central bank predicts that due to temporary factors, inflation will remain high for several months, then gradually decline, and in the first half of 2021 approach the 3% target level.
6​ GEORGIA Country Report ​June 2020 ​ ​www.intellinews.com