Georgia's Galt & Taggart talks about need for fiscal stimulus in country
BAKU, Azerbaijan, March 13
By Tamilla Mammadova – Trend:
If the negative impact of coronavirus on the Georgian economy deepens, the government will face the need to introduce fiscal stimulation, said analyst of Georgia's Galt & Taggart investment company Eva Bochorishvili, Trend reports citing Georgian media.
According to the analyst, it is possible that the government will be forced to take loans from international financial institutions to help the economy.
“Situation can develop according to three scenarios. The first provides for a relatively quick exit of the global economy from the crisis in about two months. The second predicts a much slower pace, and the economy’s exit from the current situation is forecasted no earlier than in the third quarter. The third scenario provides for a global economic decline,” Bochorishvili said.
According to the analyst, if the events develop according to the third scenario, fiscal stimulation will be very important, including by taking external debts, and the current budget parameters provide for such an opportunity.
“This is very important, because state intervention will be needed to keep the lari rate at an acceptable level,” she said.
Coronavirus outbreak has particularly affected the tourism sector in Georgia. According to official statistics, the tourism sector of Georgia in February this year suffered losses of 30 million lari ($10.5 million) due to the decrease in the number of visits by foreigners.
Against the backdrop of the outbreak of the coronavirus, as well as the oil crisis in the world, the national currency of Georgia began to fall rapidly.
As of today, Georgia has 25 confirmed cases of coronavirus.
Amid the coronavirus spread, Georgia has suspended direct flights with China, Iran and Italy, which are currently the largest centers of the outbreak.
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