BAKU, Azerbaijan, March 31
Tamilla Mammadova – Trend:
Georgian economy fell into recession in 2020, contracting by 6.2 percent, Trend reports citing the ‘Economic Review of Europe and Central Asia’ report of the World Bank (WB).
Following a strong start to the year, economic activity collapsed after March as the authorities introduced pandemic-related lockdown measures.
"The shock has been broadbased, but the transport, tourism, and construction sectors suffered the largest impacts. Job and income losses were severe. The unemployment rate reached 20.4 percent in the fourth quarter of 2020," the report said.
Poverty is estimated to have risen by 5.4 percentage points in 2020 (using the national poverty line).
The economic shock also put pressure on the external accounts. The current account deficit reached 12 percent of GDP in the first nine months of 2020, driven by weak services exports as border closings halted tourist arrivals.
"The deficit was only partially offset by an improving net income balance and transfers from abroad— remittances remained resilient and a narrowing trade deficit driven by import compression as domestic demand weakened. On the financing side, substantial public borrowing fully financed the gap and allowed for reserves accumulation," said the report.
Official reserves rose to $3.9 billion by the end of 2020 (representing nearly 5 months of goods and services imports). However, the external debt-to-GDP ratio jumped to 124 percent of GDP by end-September, up from 102 percent of GDP a year earlier.
---
Follow the author on Twitter: @Mila61979356
