Page 13 - GEORptMay21

3.1 Macroeconomic overview
Georgia’s GDP down 4.2% y/y in Q1
Georgia’s first-quarter GDP contracted by 4.2% y/y, according to the rapid estimate published by statistics office Geostat.
The figure marks a clear improvement from the 6.8% decline seen in Q4. However, it was partly the result of base effects seen one year after the economic difficulties caused by the coronavirus crisis began. The first positive quarterly GDP data on an annual comparison is expected for Q2, one year after the 13.2% plunge seen in the second quarter of 2020. But as tourism is still far from returning to normal in Georgia, it is only going to be a partial economic recovery, however strong it may seem in annual terms.
GDP is estimated to have risen by 4% y/y in March, a big improvement from the 11.5% y/y contraction seen in January. In February, the GDP was down 5.1% y/y, according to Geostat's rapid estimate.
The gradual improvement in the GDP figures expected through the year will be delivered by the combined effect of the lifting of pandemic restrictions (they were still very tight in January) and base effects: GDP, amid the crisis, dropped for the first time, by 2.7% y/y, in March 2020.
Notably, the 4% y/y advance in March of this year fully offset the drop seen in the same month of last year, but such offsets will probably not be seen throughout this year. The latest forecast for the country’s GDP dynamics in 2021, issued by the Asian Development Bank (ADB), envisages 3.5% of growth; it would not fully offset the 6.2% contraction of last year.
In March 2021, positive real growth compared to the same month of the previous year was estimated as present in the financial and insurance sectors, as well as in trade, manufacturing, real estate activities, utilities, transportation and storage, information and communication.
Declines were assessed in construction, mining and quarrying, the arts, entertainment and recreation.
13 GEORGIA Country Report May 2021 www.intellinews.com