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 point lower than our recent prediction. Economic activity fell sharply due to global pandemic, although the decline was mitigated by the relatively strong fiscal stimulus and lending.

This quarterly report provides an analysis of economic trends, as well as denoting the challenges and opportunities (in local, regional, and global contexts) in the selected value chains within six sectors to improve evidence-based decision-making by providing quality information and analytics. These specific sectors are tourism, creative industries, light manufacturing, shared intellectual services, waste management, and recycling, along with cross-cutting sectors. The analysis tracks trends from 2014 to the third quarter of 2020.

On the 25th of January, the Agricultural Policy Research Center attended a hearing of the draft law on agritourism by the sectoral committee of the Parliament of Georgia, during which our research team presented the findings of the Regulatory Impact Assessment (RIA) of the draft law and discussed the associated socio-economic benefits and costs.

ISET-PI’s forecast of real GDP growth for the third quarter (July-September) of 2020 remains at -11.6%, unchanged from last month’s prediction. The third estimate for the fourth quarter (October-December) growth forecast stands at -11.8%. Notably, our econometric model depends only on retrospective information (past observations), thus, the abnormally large negative growth of real GDP during the state of emergency period causes an overestimation of the contraction in the following quarters.

In partnership with PMC Research, ISET Policy Institute is working on the project “Sector and Value Chain Analytics” under the USAID Economic Security Program, implemented by DAI. Using quantitative and qualitative analytical methods, the project team analyzes economic tendencies in the local and also regional/global context, competitiveness of local businesses, opportunities, and challenges in various targeted value chains.