Georgia Economic Forecast

Georgia Economic Outlook

May 12, 2020

Available data already hints at the Covid-19 hit to the economy in Q1, which is set to accentuate even further in Q2. Economic activity contracted for the first time in over five years in March. The services sector particularly suffered as businesses closed due to the state of emergency, which has now been extended until 22 May. Similarly, merchandise exports collapsed in the same month as the spread of the coronavirus shuttered foreign demand, particularly from the U.S. and Russia. In late April, the government unveiled a six-phase plan to gradually reopen the economy over the next three months, and also presented a GEL 3.5 billion (around 6.0% of GDP) economic package aimed at supporting households and businesses deal with the pandemic’s impact. Moreover, on 1 May, the IMF approved a USD 200 million disbursement to help the country meet the urgent fiscal and external financing needs arising from the pandemic.

Georgia Economic Growth

After a decade of uninterrupted and robust growth, the economy is now seen contracting due to the significant blow dealt by Covid-19. A fall in external demand and tourism activity will pummel exports, while domestic demand will be restrained due to the containment measures put in place. Increased pressure to the fiscal and external positions are additional risks ahead. FocusEconomics panelists project GDP to shrink 3.0% in 2020, which is down 2.6 percentage points from last month’s forecast, and expand 5.0% in 2021.

Georgia Economy Data

2014 2015 2016 2017 2018
Population (million)3.73.73.73.73.7
GDP per capita (USD)4,4414,0164,0614,3614,718
GDP per capita (EUR)-2,921.83,6183,6683,8663,999
GDP (USD bn)16.514.915.116.217.6
GDP (EUR bn)-10.913.513.714.414.9
Economic Growth (GDP, annual variation in %)4.63.02.94.84.8
Fiscal Balance (% of GDP)-3.2-1.0-1.3-0.8-0.7
Public Debt (% of GDP)35.641.444.445.144.9
Money (annual variation of M2 in %)9.1-2.512.929.416.1
Inflation Rate (CPI, annual variation in %)3.14.02.16.02.6
Policy Interest Rate (%)4.008.006.507.257.00
Exchange Rate (vs USD)1.882.402.662.592.68
Exchange Rate (vs USD, aop)1.762.272.372.512.53
Exchange Rate (vs EUR)2.282.612.813.103.06
Exchange Rate (vs EUR, aop)2.342.522.622.832.99
Current Account (% of GDP)-10.8-11.8-12.5-8.1-6.8
Current Account Balance (USD bn)-1.8-1.8-1.9-1.3-1.2
Trade Balance (USD billion)-4.3-4.0-3.9-3.8-4.1
Exports (USD billion)4.03.02.93.64.4
Imports (USD billion)8.37.06.77.48.5
Exports (annual variation in %)-4.7-24.4-5.224.623.4
Imports (annual variation in %)7.6-15.8-3.29.415.5
International Reserves (USD)2.72.52.83.03.3
External Debt (% of GDP)84.7102105107101

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Georgia Facts

Value Change Date
Exchange Rate2.860.0 %Jan 01
Stock Market0.10.55 %Jan 07

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