Which sectors of Georgia's economy affected by coronavirus?
BAKU, Azerbaijan, March 12
By Tamilla Mammadova – Trend:
Coronovirus has a direct impact on the tourism sector in Georgia, Deputy Head of Macroeconomic Policy Research Center at International School of Economics at Tbilisi State University (ISET), the ISET Policy Institute (ISET-PI) Giorgi Mzhavanadze told Trend.
“Georgia has suspended flights to Iran, China and Italy. In addition, the flow of tourists to Georgia has decreased, because tourists from other countries are unlikely to want to visit places where the coronavirus has already been identified. In 2018, tourism accounted for approximately 11 percent of Georgia’s GDP. If the situation with the coronavirus will continue and even worsen, then the effect will be catastrophic for the GDP indicator,” Mzhavanadze said.
According to him, these indicators may drop to zero.
“If this epidemic ends before the start of the tourist season, then this effect will be minimal for GDP,” the deputy head added.
According to Mzhavanadze, to date, this situation also has affected the exchange rate of lari.
“Two factors have an effect. The first is the coronavirus epidemic, due to which the number of tourists has decreased this season, and accordingly the flow of foreign currency into the country has declined. As a result, the lari is depreciating these days. Although it stabilized in early March, it has again begun to depreciate over the past three days,” he said.
According to him, the second factor that had a significant impact on the lari was the fall in oil prices.
“This negatively affects the countries with which we maintain active trade relations. As for other sectors, I think the impact will be exerted on the export of metals. Due to lower oil prices, copper and manganese prices will fall on the world market, which will affect our exports, because they have been the main articles of our export over the past 10 years,” added Mzhavanadze.
According to him, all this will have a negative further impact on economic growth and the lari exchange rate.
As of today, Georgia has 24 confirmed cases of coronavirus.
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