IMF talks about COVID-19 pandemic impact on Georgia’s economy

IMF talks about COVID-19 pandemic impact on Georgia’s economy

BAKU, Azerbaijan, Nov. 11

By Tamilla Mammadova – Trend:

The COVID-19 pandemic has had a major impact on Georgia’s economy, Trend reports via the International Monetary Fund (IMF).

IMF staff team led by Mercedes Vera Martin conducted virtual discussions from October 5 to November 9, 2020, on the Seventh Review under the Extended Fund Facility (EFF) arrangement.

“Following productive discussions, the Georgian authorities and the IMF team reached a staff-level agreement on the conclusion of the Seventh Review of the EFF arrangement. Performance under the IMF-supported program was satisfactory in the first half of 2020. The agreement is subject to approval by the IMF management and the Executive Board. Consideration by the Executive Board is expected in December 2020. Completion of the review will make SDR 79 million (about $112.1 million) available to Georgia, bringing total disbursements under the EFF arrangement to SDR 406 million (about $576.4 million)," said Vera Martin after the conclusion of the mission.

According to her, the shock is expected to cause a contraction of 5 percent in GDP in 2020, one percentage point greater than projected at the time of the Sixth Review, on account of a more negative impact of the lockdown and a more protracted shock.

A the end of 2020 inflation is projected at 3.5 percent as high food prices during the lockdown have been fully offset by the decline in inflation after the reopening. The external position has deteriorated as tourism revenues came to a virtual standstill. The current account deficit is expected to widen to 9.7 percent of GDP in 2020, from 5.4 percent in 2019. Nevertheless, high remittances and lower imports have contained Georgia’s external financing needs, and gross international reserves remain at comfortable levels thanks to the augmentation under the IMF arrangement and donor financing.

The fiscal deficit is expected to widen on the back of lower tax revenues and fiscal support measures provided to support those impacted by the shock. Preliminary data suggest a tentative recovery in domestic demand began in June. Growth in credit to the private sector has remained robust, partly supported by government subsidies on lari-denominated mortgages. Slack in demand combined with the post-lockdown recovery in supply has recently put downward pressure on inflation.

Growth is expected to rebound to 4.3 percent in 2021 as the effects of the pandemic fade, but with considerable downside risks to the outlook. The revision in the 2021 growth outlook, from 5 percent at the October 2020 World Economic Outlook, is attributed to uncertainty associated with the regional conflict and the increased number of COVID-19 cases in Georgia. Inflation is expected to converge to the 3-percent target by end of 2021.

Medium-term growth is projected to remain unchanged at 5¼ percent supported by infrastructure spending and sustained structural reforms to increase productivity and enhance private sector-led growth. Macroeconomic policy discipline and donor support would keep reserves at an adequate level over the medium term.

The shock to tourism is expected to be protracted with tourism receipts assumed to recover to 2019 levels only by 2024. The current account deficit is projected at 5.5 percent of GDP by 2025, financed predominantly by FDI. The authorities envisage to use all policy tools available to limit further economic damage, if downside risks were to materialize.


Follow the author on Twitter: @Mila61979356

Subscribe to Trend in Google News! Subscribe
Major terrorist attack against rally with Erdogan's participation prevented in Turkey
Major terrorist attack against rally with Erdogan's participation prevented in Turkey
Great number of EU, NATO countries interested in Turkish drones - Cavushoglu
Great number of EU, NATO countries interested in Turkish drones - Cavushoglu
Erdogan discusses humanitarian aid with Red Crescent, Red Cross
Erdogan discusses humanitarian aid with Red Crescent, Red Cross
Loading Bars
State Customs Committee discloses TOP-5 trade partners of Azerbaijan
State Customs Committee reveals trade turnover between Azerbaijan and China
Azerbaijani Defense Ministry presents weekly review (VIDEO)
Georgia reports 3,410 coronavirus cases, 4,732 recoveries, 46 deaths
At least 14 civilians mistakenly killed by Indian forces in remote northeast
Iranian currency rates for December 5
Kyrgyzstan confirms 42 new COVID-19 cases
New Year budget to depend on activities’ scale - Tbilisi Mayor
Iran’s SPGC shares data on production of its fifth refinery
Baku International Sea Trade Port unveils cargo transshipment for 10M2021
Pakistan receives $3 billion loan from Saudi Arabia
VISA open to co-op with all key players in Azerbaijan’s transport sector (Exclusive)
6.1-magnitude earthquake rattles southern Philippines
Soyuz-ST-B with 2 Galileo satellites launched from Kourou spaceport
Dutch former queen Beatrix tests positive for COVID-19
10 mln French have received COVID-19 booster shots: minister
Iran abandoned any compromises in latest nuclear talks - U.S.
Chile reports first case of Omicron variant
White House confirms plans of holding video call between Biden and Putin on December 7
Vienna talks on Iran nuclear deal to resume next week - Russian Foreign Ministry
1 killed, 40 injured following volcanic eruption in Indonesia
Body of another Armenian serviceman found in Azerbaijan's Khojavand
Bitcoin tumbles 9.95% to $48,397.56
Passenger transportation via Iran's Kermanshah International Airport declines
UK records another 42,848 coronavirus cases
Explosion occurred near Iran's nuclear facility
Azerbaijan hands over to Armenia body of saboteur neutralized in attack on Azerbaijani serviceman in Khojavand
Azerbaijan talks entreprises to be commissioned at Aghdam Industrial Park
Major terrorist attack against rally with Erdogan's participation prevented in Turkey
Great number of EU, NATO countries interested in Turkish drones - Cavushoglu
Georgian PM meets with President of FIBA Europe
OSCE MG ready to host meeting between Azerbaijani and Armenian FMs
Value of Azerbaijan's export to US surges for 10M2021
Prices on several main food products in Kazakhstan continue to lower
Agrarian sector of ‘smart village’ in Azerbaijan’s Zangilan to be combined modern urban planning – minister
Azerbaijan discloses project cost of agropark in Yevlakh (PHOTO)
Buy/sell operations at Iran Mercantile Exchange down
Saudi Arabia, France agree to strengthen cooperation
Biden, Putin to hold video call on Tuesday
India, Australia are natural economic partners, says Tony Abbott
Azerbaijan receives mine maps of its territories liberated from Armenian occupation
Erdogan discusses humanitarian aid with Red Crescent, Red Cross
Uzbekistan intends to increase dried fruit exports to China
No Omicron strain detected in Georgia - NCDC Head
Aligarh’s Areeba shoots to fame, breaks stereotypes about Muslim girls
Iran’s Bahar Azadi gold coin price skyrockets
Azerbaijan shares data on number of vaccinated citizens
Azerbaijan confirms 1,406 more COVID-19 cases, 1,787 recoveries
Tactical exercises held in Azerbaijan's commando military unit - MoD (PHOTO/VIDEO)
New composition of Supervisory Board of Azerbaijan Industrial Corporation approved
Iran reveals COVID-19 data for December 4
President Ilham Aliyev sends congratulations to heads of Thailand, Finland
France, Europeans working to open joint mission in Afghanistan - Macron
Ranking of natural gas importers from Azerbaijan
Uzbek Commodity and Raw Materials Exchange reveals volume of its transactions
SOCAR Georgia Gas announces tender on gas stations restoration
Iran eyes increase in passenger transportation via Yazd Shahid Sadooghi Airport
Azerbaijan reveals oil exports to Canada in 10M2021
Weekly review of main events in Azerbaijan's transport sector
Turkmenistan’s president approves anti-crisis program for 2022
Azerbaijan’s liberated territories have high potential for solar energy - RES agency
Weekly review of key events in Azerbaijan's ICT sector
Russian company to help automate, digitalize processes in Uzbek energy sector
Iran reaches increase in load/unload operations in Shahid Bahonar port
Top 10 Azerbaijani oil importers
MFA reveals reason why Armenia-Azerbaijan ministerial meeting didn't take place
Kazakhstan talks construction of wind power plants in Kostanay region
Azerbaijan achieves practical results to restore hydropower plants in liberated lands - agency's CEO
Azerbaijan’s metallurgical company notes increases in steel production over 9M2021
Iran also to be able to take advantage of Zangazur corridor – ex-Iranian ambassador to Azerbaijan
Russia-UAE trade turnover hits fresh all-time high surpassing $4 bln - Mishustin
Kazakhstan’s Almaty Power Plants to buy pumping, ventilation equipment via tender
Azerbaijan discloses oil exports to Ukraine over 10M2021
Azerbaijan unveils volume of oil exports to Belarus in first 10M2021
Georgian Railway shares updated report on income within 9M2021
Azerbaijan’s 10M2021 oil exports to UK revealed
Kazakhstan to timely fulfill its obligations under COP26 – PM
Azerbaijan opens investment tender to privatize Sumgayit Construction Service company
Iran finds way to supply its far north, north-east provinces with gas
Georgia releases COVID-19 data for December 4
LUKOIL Uzbekistan Operating LLC opens tender for supply of shut-off and control valves
Mikheil Saakashvili not to be treated abroad – Georgia's minister
Russia offers Azerbaijan to switch to barcoding for fruit, vegetables exports
Tripartite gas swap deal with Turkmenistan, Azerbaijan, may help Iran kill two birds with one stone
Azerbaijan Mortgage and Credit Guarantee Fund issues record amount of loans in 10M2021
Goods movement across Azerbaijani-Russian border to be accelerated
Azerbaijani oil prices increase
Kazakhstan boosts trade with Romania over 9M2021
Weekly review of Azerbaijan's oil & gas sector
Weekly review of Azerbaijani precious metals market
Weekly review of Azerbaijani currency market
Treatment of servicemen injured in helicopter crash of Azerbaijan’s State Border Service continues
Turkey to support Azerbaijan in installing seismic stations in Karabakh
Iran aims to increase local solar power production
Gamaleya Center ready to accept state order for up to 10 mln sets of Sputnik M
Kazakhstan’s Intergas Central Asia to buy welding equipment via tender
Georgia’s export of oil products increases
India’s air defence gets a big boost, Russia starts delivery of S-400 missiles
India's defence procurement guided by national security interests: MEA
Uzbekistan shares domestic COVID-19 data for December 3
All news