Georgia Economic Outlook

October 6, 2020

GDP plummeted 12.3% year-on-year in Q2, marking the worst result on record as the economy felt the unprecedented impact of the pandemic. The downturn was broad-based, with the external sector suffering from supply chain disruptions, eviscerated foreign demand and vanishing tourist inflows, while domestic demand reeled from sinking retail sales and sliding manufacturing activity due to nationwide containment measures. On a brighter note, sustained growth in the agricultural and mining sectors softened the blow somewhat. Turning to Q3, although available data points to a fragile recovery, economic conditions remained muted. In July–August, economic activity fell at a milder pace, mainly thanks to healthy activity growth in the mining and manufacturing sectors. Similarly, merchandise exports contracted at the softest rate since February in August, boding well for a recovery in the external sector.

Georgia Economic Growth

The economy is poised for its sharpest contraction in nearly three decades this year as the Covid-19 pandemic deals a massive blow to remittance inflows, tourism and exports. Similarly, containment measures will hurt the domestic economy amid heightened uncertainty and a weaker labor market. However, GDP should rebound strongly next year, after the health crisis subsides. FocusEconomics panelists project GDP to shrink 5.1% in 2020. In 2021, the economy is expected to expand 5.3%, which is unchanged from last month’s estimate.

Georgia Economy Data

	2015	2016	2017	2018	2019
Population (million)	3.7	3.7	3.7	3.7	3.7
GDP per capita (USD)	4,016	4,061	4,361	4,718	4,767
GDP per capita (EUR)	3,618	3,668	3,866	3,999	4,275
GDP (USD bn)	14.9	15.1	16.2	17.6	17.7
GDP (EUR bn)	13.5	13.7	14.4	14.9	15.9
Economic Growth (GDP, annual variation in %)	3.0	2.9	4.8	4.8	5.1
Fiscal Balance (% of GDP)	-1.2	-1.5	-0.5	-0.8	-1.8
Public Debt (% of GDP)	36.8	40.3	39.9	39.9	41.2
Money (annual variation of M2 in %)	-3.8	14.8	27.9	15.9	-
Inflation Rate (CPI, annual variation in %)	4.0	2.1	6.0	2.6	4.9
Policy Interest Rate (%)	8.00	6.50	7.25	7.00	9.00
Exchange Rate (vs USD)	2.40	2.66	2.59	2.68	2.86
Exchange Rate (vs USD, aop)	2.27	2.37	2.51	2.53	2.82
Exchange Rate (vs EUR)	2.61	2.81	3.10	3.06	3.21
Exchange Rate (vs EUR, aop)	2.52	2.62	2.83	2.99	3.15
Current Account (% of GDP)	-11.8	-12.5	-8.1	-6.8	-5.1
Current Account Balance (USD bn)	-1.8	-1.9	-1.3	-1.2	-0.9
Trade Balance (USD billion)	-4.0	-3.9	-3.8	-4.1	-3.7
Exports (USD billion)	3.0	2.9	3.6	4.4	4.9
Imports (USD billion)	7.0	6.7	7.4	8.5	8.7
Exports (annual variation in %)	-24.4	-5.2	24.6	23.4	12.2
Imports (annual variation in %)	-15.8	-3.2	9.4	15.5	1.9
International Reserves (USD)	2.5	2.8	3.0	3.3	3.5
External Debt (% of GDP)	102	105	107	101	105

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Georgia Facts

	Value	Change	Date
Exchange Rate	2.86	0.0 %	Jan 01
Stock Market	0.1	0.55 %	Jan 07

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Georgia Economic Outlook

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