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for the sector has deteriorated. Developments have put further pressure on the public deficit, seen in April by the IMF as heading for 8.5% of GDP.
In response to declining economic activity and easing inflation pressures, ​the National Bank of Georgia (NBG) on October 28 kept its key refinancing rate at 8%. ​The price dynamics in recent months were in line with forecasts, NBG said, with​ inflation continuing to decline, reaching 3.8% in September.
The central bank also stated that inflation, driven downward by weak aggregate demand, will adhere to a declining trend​ ​and remain close to the target level in 2021.​ ​Periodic currency interventions by the national lender would continue, it added. The central bank has emphasised that its monetary policy will remain tight in order to reduce inflationary expectations and return the inflation target to 3% in the first half of 2021.
On the political front​,​ ​Georgian Dream, the ruling party of oligarch Bidzina Ivanishvili, was on November 21 declared the outright winner​ ​of the second round of Georgia’s parliamentary elections​ after its candidates won all of the 17 seats subject to runoff voting as the opposition went ahead with a boycott of the poll.
A third round of negotiations involving foreign ambassadors, Georgian Dream and the opposition will take place in coming days in a bid to resolve the dispute over claimed vote rigging that has seen the opposition parties announce a boycott of the legislature.
2.0​ ​Politics
2.1​ ​Georgia imposes tight coronavirus restrictions for
next two months
The government of Georgia has imposed a set of tight restrictions to curb the spread of coronavirus. They will apply between November 28 and January 31, and will run in tandem with a new assistance programme to provide both social and business support.
Georgia on November 26 reported 3,801 new cases of coronavirus in the latest recorded 24-hour period, equivalent to 0.86 per 1,000 residents. The infection rate has been at the same high level for several days.
According to Prime Minister Giorgi Gakharia, the restrictions will hit GDP to the tune of 0.7%-0.8%.
Gakharia announced a fourth economic support package for the restricted period worth Georgian lari (GEL) 1.1bn ($330mn). It will be financed from $1.5bn of loans signed up to by Georgia to mitigate the effects of the health and economic crisis.
The support package includes income tax benefits, tax write-offs for tourism
6​ GEORGIA Country Report ​December 2020 ​ ​www.intellinews.com