ISET-PI has updated its Georgian real GDP growth rate forecast for the first and second quarters of 2020. Here are the highlights of this month’s release.
Geostat has released its rapid estimate of real GDP growth for February 2020. The estimated growth stands at 2.2%, while the average real GDP growth for January-February 2019 reached 3.7%.
ISET-PI predicted 4.7% and 5.4% growth for the first and second quarters of 2020 respectively, based on February 2020 data. This data does not yet fully account for the negative impacts of the COVID-19 pandemic on the national economy.
Consequently, the annual growth in 2020 based on February data was expected to be 4.8% in the worst-case scenario, and 5.9% 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) predicted a 5.2% 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. While we cannot estimate this impact precisely, we can consider several scenarios, according to which the real GDP growth is expected to decrease significantly, depending on the length and severity of the pandemic.