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Georgia’s economy to continue to shrink in first quarter of 2021 - ISET-PI

Finance Materials 26 January 2021 12:11
Georgia’s economy to continue to shrink in first quarter of 2021 - ISET-PI

BAKU, Azerbaijan, Jan.26

By Tamilla Mammadova – Trend:

Georgia’s economy will continue to shrink in the first quarter of 2021, Trend reports via the ISET-PI, a think-tank based at the International School of Economics of Tbilisi State University.

According to the research, the economy will shrink by 3.5 percent in January-March.

The country saw a 7.7 percent decline in November while in the fourth quarter of the year ISET forecasts a 5.2 percent decline in the economy.

The study says that tourism has had the biggest impact on the economic downturn. The number of international travelers fell by 91 percent in November.

In the third quarter of 2020, GDP at current prices totaled 13.33 billion lari, while the real GDP declined 5.6 percent compared to the same period of last year. Annual inflation of consumer prices amounted to 3.8 percent in Georgia in October 2020, which is higher than the targeted 3 percent.

Notably, inflation converged to the targeted value at the end of 2020. Approximately 1.5 percentage points of CPI inflation were related to higher food prices (5.4 percent annual increase), while tobacco prices contributed 0.4 percentage points (13.5 percent annual growth).

However, decreased oil prices (16.7 percent annually) made a notable negative contribution (0.6 ppts) to the annual inflation measure.

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