Page 26 - GEORptMay21

5.1.2 Current account dynamics
Georgia’s current account gap surges to 12.3% of GDP in 2020
Georgia’s current account deficit amounted to $2.0bn, or 12.3% of GDP in 2020. That's marked down as more than double the $891mn (5.3% of GDP) deficit recorded in 2019 and slightly worse than the latest forecast from Fitch Ratings (prediction: 12% of GDP), according to a statement of the National Bank of Georgia (NBG).
Shrinking tourism revenues amid the coronavirus pandemic were mainly responsible for the deterioration in Georgia’s external position. To offset the loss of forex revenues from tourists and the expected impact on the balance of payments, the government borrowed heavily last year.
Georgia currently owes $20.3bn in external debt, according to NBG data. The external debt to GDP ratio hit 125% in 2020.
Fitch Ratings in February forecast that Georgia's current account deficit will widen to 12.5% of GDP in 2021, before narrowing to 7.9% in 2022. A domestic-driven recovery and a weak outlook for tourism would mean a higher pace of growth in imports than exports, it said.
Georgia's external indebtedness has increased while the medium-term outlook for foreign exchange earnings has weakened, S&P said in a February 26
26 GEORGIA Country Report May 2021 www.intellinews.com