BAKU, Azerbaijan, Dec. 23
By Tamilla Mammadova – Trend:
Nearly zero international travelers, reduced export, minimum economic activity is simply translated to forgone revenue for the Georgian economy, said Giorgi Mzhavanadze, Senior Researcher at the ISET Policy Institute, Trend reports via Georgian media.
As he said, government expenditures and the current budget deficit are last but not least constituent of the cost of the global pandemic to the Georgian economy.
“As international travel was broadly banned and Georgia resumed international flights with only a limited number of countries, the number of international travelers declined by 94.9 percent year-on-year. At the same time, revenues from international travelers fell nearly to zero in 3Q2020. In this quarter alone Georgia lost $1.12 million from tourism revenues,” noted Mzhavanadze.
Budget data in 3Q2020 fully reflected the impact COVID-19 had on the economy, says Mzhavanadze, adding that total revenues to the general budget amounted to 2.88 million lari ($884,585), a 13.4 percent year-on-year decrease.
“As a result, current governmental expenditures increased by 33.3 percent year-on-year in 3Q2020 (and amounted to 3.47 million lari ($1.06 million)). This growth was mainly driven by higher spending on social benefits (+47.8 percent year-on-year)”, he said.
In his words, the support package includes healthcare and virus management costs, targeted direct and indirect income transfers to affected households, tax relief, the introduction of credit guarantee schemes for businesses, and payroll support, etc.
“Overall, in 3Q2020, the budget deficit amounted to 1.67 million lari ($512,936), 6.5 times higher than in the same period of the previous year. According to a revised version of the State Budget, the deficit would constitute 8.5 percent of GDP in 2020,” Mzhavanadze said.
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