BAKU, Azerbaijan, Sept. 3
Tamilla Mammadova – Trend:
The real GDP 2021 growth forecast (8 percent) is by 0.3 percentage points (pp) higher compared to the Georgian government forecast (7.7 percent) and differs by 2.8 pp from the forecast of December 2020, the Parliamentary Budget Office of Georgia (PBO) told Trend.
"As it is known, the negative consequences caused by the new coronavirus (COVID-19) in the world have affected almost all countries, including Georgia," said the source.
As the PBO noted, herefore a significant decline in economic growth was observed in 2020 (-6.2 percent). Expected GDP growth in 2021 is mainly driven by the base effect of a high reduction in 2020 caused by the COVID-19 pandemic and by the easing/canceling of the pandemic-related restrictions, which stimulate both demand and supply growth.
"Along with the vaccination process and easing/canceling of the various types of restrictions, external trade will also start to recover. Compared to the December estimate, this forecast takes into account additional information available for the current period," the source added.
According to the PBO, the improvement in economic growth is due to the significantly better development trend for the current period. High economic growth, observed in April-May, also external trade figures, indicating a gradual recovery in the economic activity. In the 2021 assessment, uncertainty around the forecast remains.
"The positive outlook for 2021 is due to the fact that the measures taken to prevent COVID-19 (state of emergency and various restrictions) have broken the so-called "Global value chain" however, as it seems by 2021, economic actors are better adapted to the pandemic and the so-called “value chain” will be restored both within the country and worldwide," noted the source.
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