May 2020 GDP Forecast | Coronavirus realities: dismal Q2 and Q3 growth forecasts may not be low enough
09 June 2020

ISET-PI has updated its Georgian real GDP growth rate forecast for the second and third quarters of 2020. Here are the highlights of this month’s release:

Geostat has released its rapid estimate of real GDP growth for the first quarter of 2020, which stands at 1.5%.

The estimated real GDP declined by 16.6% in April 2020 yearly and by 3.6 percent in the first four months of 2020. In April, the estimated real growth compared to the same period of the previous year posted negative in almost all activities, except mining and quarrying. Moreover, VAT payers’ turnover, used in rapid estimations of economic growth, dropped by 32.8% annually over the same period.

ISET-PI predicted 2.0% and 2.5% growth for the second and third quarters of 2020, respectively, based on March 2020 data. This does not yet fully account for the negative impacts of the COVID-19 pandemic on the national economy.

Consequently, the annual growth in 2020, from March data, is expected to be 2.1% in the worst-case scenario, and 2.5% in the best-case or an average long-term growth scenario. Our middle-of-the-road scenario (based on the average growth in the last four quarters) predicts a 2.3% increase in real GDP.

COVID-19 is expected to impact the Georgian economy via tourism, remittances, trade, lower domestic production, and service provision due to the strict social isolation measures. According to the National Bank of Georgia (NBG) and the International Monetary Fund (IMF), Georgia’s annual real GDP growth forecast for 2020 amounts to -4%.