Page 5 - GEORptApr20
P. 5
1.0 Executive summary
Georgia has imposed an overnight curfew, closed its public transport systems, including the Tbilisi metro, and banned gatherings of more than three people, effective March 31, in stepping up its efforts at battling the spread of the coronavirus (COVID-19), Prime Minister Giorgi Gakharia has announced. The number of confirmed coronavirus cases in Georgia stands at 100 to date, with no related deaths. Some 4,978 people are under quarantine and 266 are under hospital supervision. Of those infected, 18 patients have recovered.
On March 21, President of Georgia Salome Zourabichvili declared a state of emergency for 30 days to allow the government to pursue required measures to fight the impacts of the COVID-19 pandemic in the country. Georgia also decided to halt flights to and from its airports, with very limited exceptions. As of March 22, Georgia had confirmed 54 cases of COVID-19.
Georgia’s currency, the lari (GEL), weakened by 6.5% versus the dollar and 8.3% against the euro on March 24, leading to the central bank, the National Bank of Georgia (NBG), opting to sell $40mn into the market on March 25. The national lender had already sold $60mn in two similar interventions since the currency came under pressure a couple of weeks ago. The latest move was announced after the GEL reached 3.45 to the USD driven by expectations of weaker tourism revenues and remittances caused by the ongoing COVID-19 pandemic that has led to the economic shutdowns or restrictions across key industries around the world.
The European Commission said on March 30 that it has reallocated more than €140mn ($154mn) to assist Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine in their fight against the coronavirus (COVID-19) pandemic.
NBG president Koba Gvenetadze said that in many sectors of the economy there would be a decrease in income amid the virus outbreak. NBG on March 18 kept its refinancing rate at 9%, but the central bank announced at the same time that the government and the central bank were in talks with international financial institutions to secure assistance with respect to the current challenging situation.
Annual inflation in Georgia in February stood at 6.4%, up 2.3% y/y but in line with what was seen in January. However, the worst is still to come for the country’s economic fundamentals. The GEL has plunged by double digits in a matter of weeks and similar episodes last year indicate that investor and public sentiment can hardly be stabilised.
Georgia’s government will support the economy to mitigate the effects of the 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.
5 GEORGIA Country Report April 2020 www.intellinews.com
