
Overview
- Strong drop in GDP (-5.1%) in 2020
- Before the crisis, GDP 2020 was forecast at 4.3%; economy hit hard by pandemic
- Main drivers: lower exports of services and decline in investments
- Key sector: tourism; drop in international visitors by 80%
- Recovery of GDP by 4.3% forecast for 2021, lower rate than before the crisis
- Lari depreciated by 13% in 2020 against backdrop of uncertainty and lower exports
- NBG reacted by sizeable FX interventions; policy rate cut by 1 pp to 8%
- Remittances increased by 8.8% yoy, much stronger than initially anticipated
- Strong anticyclical response by the government to the crisis
- Twin deficits: current account deficit at 9.8%, public deficit of 9.0% of GDP
- Augmented IMF programme crucial for overcoming the crisis