BAKU, Azerbaijan, April 21
By Tamilla Mammadova - Trend:
The International Monetary Fund (IMF) sees a recovery of Georgia’s economic growth in 2021, after a 4-percent contraction this year due to the coronavirus outbreak, Trend reports referring to Reuters.
As reported, the IMF stands ready to help Georgia raise $1.6 billion from donors to finance balance of payments needs.
“Growth in 2021 is projected at 4 percent in Georgia, supported by the lift in containment measures and the pick-up in trading partners’ growth,” said Selim Cakir, the fund’s resident representative in Georgia.
Last week, IMF said it expected Georgia’s gross domestic product (GDP) to decline by 4 percent in 2020, revising down its previous forecast for growth of 4.3 percent.
Cakir said that substantial decline in tourism revenues, which amounted to 20 percent of GDP in 2019, lower exports, remittances and consumption, as well as reduced capital inflows and investment, would contribute to a contraction in growth in 2020.
According to him, deteriorating trade, halted tourism and weaker remittances were expected to widen the current account deficit to 11.3 percent of GDP, while the fiscal deficit was expected to temporarily widen to 8.5 percent of GDP in 2020.
Cakir said another $215 million was expected to be disbursed in equal tranches in the fourth quarter of this year and in April 2021.
He praised the Georgian government for taking measures aimed at softening the economic shock of the virus. The measures include imposing a moratorium on collecting property and income taxes in the hospitality sector, easing bank lending regulations and increasing spending on infrastructure.
“The authorities have mobilized financing from the IMF and other international partners to finance the increase in health and economic measures, and build buffers that would allow for additional policy response if downside risks materialize,” Cakir said.
He said that urgent balance-of-payments needs arising from the pandemic shock were estimated at about $1.6 billion in 2020-2021, to be met by IMF financing and other donor assistance.
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