Page 16 - GEORptAug21

Georgia’s Q1 GDP contraction revised to 4.5%
“So far, the 10-year plan and specific sectoral priorities, as well as the priorities of the state strategy, have not been voiced in detail. The prime minister also noted that this work will be completed around September. It is good that the private sector is also involved in its preparation, at least we were at the meeting with international experts. Perhaps then we will understand the specific indicators in more detail,” he explained.
In general, Georgia already has the potential for economic growth above 5% per year, so in order for 5% and 6% to become 10%, it needs a completely different transformation, he argued.
“It is true that we have a 10% increase in 2021, but this figure will not be a constant 10-10.5% if new sectors are not discovered and new sectors do not grow with us as we have a boom in tourism, and I am sure it will be again," said Nadaraia.
Georgia’s statistics office Geostat has revised the country's Q1 GDP contraction to 4.5% from the 4.2% previously given as a rapid estimate. The sectors of household services and construction/real estate were the most severely hit by contraction, while areas such as financial services and mining performed well, along with health and trade.
The drop in economic output mainly reflected a significant reduction in accommodation & food services (-54.0% y/y), construction (-19.4% y/y), art & recreation (-25.4% y/y), real estate activities (-6.4%) and transport (-9.0% y/y). Accommodation and food services contributed a negative 2.4pp to the overall GDP annual dynamics. In the same area of services, arts & entertainment contributed a negative 1pp. Construction contributed a negative 1.3pp, followed by real estate activities - a sector with a sizeable 13.1% share in GDP at basic prices - was behind a negative 0.8pp. These four sectors alone thus contributed a combined negative 5.5pp.
Meanwhile, real growth was posted in financial and insurance activities (+24.0% y/y), mining (+50.3% y/y), health (+13.3% y/y) and trade (+3.9% y/y). Their combined positive contribution was 3.2pp.
16 GEORGIA Country Report August 2021 www.intellinews.com