Page 18 - GEORptJun22

TBC expects Georgia’s growth to slow at 3.5-4% this year, even under rapid resolution scenario
Under a short-lived conflict scenario, lasting under a quarter, Ukraine’s economy is expected to contract by 10-15%, that of Russia by 4% and consequently Georgia will end with a much slower economic growth this year: 3.5-4% compared to 6% expected under the baseline (no conflict) scenario, according to a research report of TBC capital exploring alternative scenarios. As the shock is exogenous, broadly similar to the pandemic, the recovery in 2023 is expected to be strong.
Under a more pessimistic, delayed resolution, scenario, the conflict would last more than a quarter, resulting in a 20% plunge in Ukraine’s GDP and a 7-10% economic contraction in Russia. In this case, Georgia’s economy would hardly advance compared to 2021, with an expected growth rate in the region of -1.5%-+0.5%.
Under the rapid resolution scenario, part of Ukraine is occupied and an uneasy peace returns. Sanctions are imposed on Russia, however, Russia continues to export energy to Europe using a carve-out regarding energy payments and there is only a temporary cut-off from the SWIFT system for most of the banks.
18 GEORGIA Country Report June 2022 www.intellinews.com