According to the preliminary statistics released by GeoStat, Georgia’s real GDP contracted by 3.8% year over year (y/y) in Q3 2020. As a result, the estimated real GDP declined by 5.0% in the first nine months of 2020, which is in line with the International Monetary Fund’s (IMF) and National Bank of Georgia’s (NBG) latest projections of -5% y/y (from October and November correspondingly).

The COVID-19 outbreak has negatively affected the Georgian economy through a reduction in FDI, exports of goods and services, and remittances. In addition, uncertainties caused by the pandemic and containment measures hit consumption and domestic investment. As a result of this reduction in aggregate demand, combined with increased production costs due to pandemic-related constraints, GDP is expected to contract by 5% in 2020 according to NBG’s latest monetary report.

The average cost of cooking one standard Imeretian Khachapuri in May 2020 stood at 4.18 GEL; 6.8% lower month-on-month compared to April. However, the Khachapuri Index did increase by 24.9% year-on-year (compared to May 2019). At this time of the year, the monthly downward trend in the Index is typically driven by a seasonal decline in cheese prices (due to the increased supply of fresh milk and a resulting lower demand for imported milk powder).

The consequences of COVID-19 on tourism and in the industrial and service sectors have been discussed broadly recently. However, little has been said about the current and future implications on the Georgian power sector. The worldwide pandemic has already had and is still expected to have, quite significant implications on both the demand and supply sides of the electricity market. Although at this stage, we cannot estimate the exact scale of the effects, it is possible to represent a general theoretical framework of the existing and potential impacts.

According to the preliminary statistics released by GeoStat, Georgia’s real GDP growth constituted 5.7% year over year (y/y) in Q3 2019. As a result, estimated real GDP growth for the first nine months of 2019 amounted to 5.0%, which is above the National Bank of Georgia’s (NBG) growth forecast for 2019 (the forecast remained unchanged at 4.5%). Meanwhile, based on September’s data, ISET-PI expects annual growth in 2019 to be 4.9%.