Economic Monitor Issue 12 | June 2020

Overview

  • GDP to drop by 4.0% in 2020; pre-COVID forecast: +4.3%
  • Consumption to drop heavily, also due to much lower remittances (Apr: -42.3%)
  • Exports to contract by 24%; but effect exaggerated due to re-exports of cars and copper
  • Tourists revenues strongly affected; perspective for Jul/Aug still not clear
  • Current account deficit to reach 11.3% of GDP; pre-COVID forecast: 5.3%
  • Exchange rate at ca. 3.0 GEL/USD; sizeable depreciation in March followed by appreciation
  • NBG’s policy rate at 8.5%; limited room for reduction due to higher-than-target inflation risks
  • Government reacted to crisis with strong anticyclical fiscal measures
  • As a result, budget deficit will amount to 8.5% of GDP in 2020; pre-COVID plan: 2.4%
  • IMF programme augmented by USD 325 m, incl. USD 200 m for budget support

Topics

  • Insolvency. On the way to a modern legislation
  • Income distribution. Progress in poverty reduction and regional development
  • COVID-19. Development of cases, domestic measures, economic support, int. financial support
Download Economic Monitor 12/2020