BAKU, Azerbaijan, July 10
By Tamilla Mammadova – Trend:
Georgia has done an excellent job at controlling the pandemic within its borders, which helped stabilize confidence and limit the impact on the economy to some degree, International Monetary Fund (IMF) Mission Chief for Georgia Mercedes Vera Martin told Trend.
"However, because Georgia is a small open economy, the speed of recovery will depend on the rebound of external demand including exports of goods and tourism, and remittances," Vera Martin said.
According to her, the post-crisis period is going to be challenging for the global economy and Georgia is not an exception.
"As noted in our June Update of the World Economic Outlook, the COVID-19 pandemic has had a more negative impact on global economic activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecasted. We expect a full recovery only once a vaccine is found," IMF mission chief for Georgia added.
In that context, if the success in containing the pandemic is sustained, most probably the worst is behind regarding the economic slowdown, and IMF can expect a gradual recovery of activity in the second half of the year, she said.
"In Georgia, the loss in income would reduce domestic consumption, and heightened global uncertainty might hamper confidence, reduce capital inflows, and delay investment. Against this challenging backdrop, the IMF forecasts the Georgian economy to contract by 4 percent in 2020 and growth to rebound by 4 percent in 2021, notwithstanding significant uncertainty in the current projections. Risks are tilted to the downside," Vera Martin added.
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