BAKU, Azerbaijan, July 30
By Tamilla Mammadova – Trend:
In Georgia, the contraction in services has been larger than in manufacturing due to the needed lockdown due to COVID-19, International Monetary Fund (IMF) Mission Chief for Georgia Mercedes Vera Martin told Trend.
According to Vera Martin, the hospitality sector, dependent on tourists and travel, has been especially hurt by the pandemic.
"The construction sector has also been affected, but we expect the impact to be contained following the recent government support scheme," she said.
As Vera Martin noted, the current crisis has unusual characteristics.
"This time, contrary to previous recessions, there is a broad-based aggregate demand shock, compounding short-term supply disruptions due to lockdowns. Consumption and services has dropped markedly, reflecting voluntary social distancing, lockdowns needed to slow transmission and allow health care systems to handle cases, steep income losses, and weaker consumer confidence," she noted.
According to the IMF Mission Chief for Georgia, firms have also cut back on investment when faced with precipitous demand declines, supply interruptions, and uncertain future earnings prospects.
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