Page 11 - GEORptApr20
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3.0 Macro Economy
Georgia - Main Macro 2014 2015 2016 2017 2018 2019 Indicators
GDP real growth (y/y, %)
4.6 2.9 2.8 4.8 4.7 5.2
GDP (per capita, $) 4,738.8 4,012.6 4,062.1 4,358.5 4,722.0 4,763.5
GDP: Final consumption expenditure, (GEL mn)
25,570.7 27,318.7 28,241.5 30,630.6 32,652.8
GDP: Gross capital formation, (GEL mn)
8,688.8 10,004.3 11,136.5 12,264.8 13,675.7
GDP: Exports, (GEL mn)
12,518.3 14,206.8 14,837.8 19,023.7 22,622.8
GDP: Imports, (GEL mn)
17,627.3 19,774.3 20,187.5 23,559.0 27,385.8
Source: bne IntelliNews, CEIC
3.1 Macroeconomic overview
Georgia’s government announces economic stimulus equivalent to 1.7% of GDP
Georgia’s government will support the economy to mitigate the effects of the coronavirus (COVID-19) pandemic by providing tax incentives for the tourism sector and deferring the payment of interest on bank loans made to entrepreneurs and individuals, Prime Minister Giorgi Gakharia said on March 13.
The PM said the further spread of coronavirus may threaten this year’s economic growth forecast of 4.5% but did not specify how far short gross domestic product might fall compared to the target.
According to Otar Nadaraia, chief economist of TBC Bank, taking into account current developments, the Georgian economy was expected to grow by 2% this year.
According to him, the situation will improve in the fourth quarter in terms of the baseline scenario and in 2021 economic growth might reach 6.5%.
“The second quarter will be the most difficult. I think the 2% increase is the benchmark that we see from today's perspective. However, by the end of the year, growth in the fourth quarter will be much higher. I should also add that if everything stabilises, growth in 2021 could be as high as 6.5%," Nadaraia said.
Gakharia explained that under the stimulus package all enterprises linked to the tourism sector would be granted income and property tax breaks until November 1, while a refund of value-added tax (VAT) for companies would be doubled to GEL1.2bn from GEL600mn.
Individuals and tourism-related companies would be permitted to defer interest payments on bank loans for four months, Gakharia said, although this move obviously depended on banks’ acceptance.
11 GEORGIA Country Report April 2020 www.intellinews.com
