ISET-PI has updated its real GDP growth forecast for the first quarter of 2021. Here are the highlights of this month’s release:
Geostat has published its rapid estimate of real GDP growth for the fourth quarter of 2020, and their estimated growth stands at -6.5%, which is 1.3 percentage points below the ISET-PI’s most recent forecast.
The annual real GDP growth in 2020 amounted to -6.1%, which is 0.6 percentage points lower than our recent prediction. Economic activity fell sharply due to the global pandemic, although the decline was mitigated by the relatively strong fiscal stimulus and lending.
Thus, the growth forecast for Q1 of 2021 was revised downward to -5.4% from -3.5% in January.
According to the recent Monetary Policy Report of the National Bank of Georgia (NBG), real economic growth forecast for 2021 revised downward from 5% to 4%. This growth prediction is based on assumptions that the epidemiological situation will improve, the tourism sector will gradually begin to recover in the second half of the year, and overall, the Georgian economy will manage to recover partially from the pandemic-related economic losses (baseline scenario). While in the pessimistic scenario, with a more prolonged and severe economic crisis, which might be a result of a slowed vaccination process (compared to the national plan of vaccination) and/or restraint of the international travel due to the fear of the virus, the real GDP growth forecast downgrades to 1%.