In a recent ISET Economist blog post, Luc Leruth explores the notion of a spatial fracture in Georgia. He wonders whether people will become accustomed to working remotely, with the COVID crisis having given them this fresh opportunity. If so, this could help decrease the strain on Tbilisi infrastructure by slowing down migration to the capital. Will COVID, unexpectedly, convince people to continue working remotely and settle outside Tbilisi in the countryside?

World economies hampered by the pandemic; countries facing public healthcare crises, with millions killed by COVID-19; thousands of cities under lockdown; social distancing and transformed social practices; countless institutions functioning online; the youth spending endless days and nights in front of computer screens; and, globally, over a year of online education. This is the reality in many countries around the world, including Georgia, in the spring of 2021.

The COVID-19 pandemic has changed our lives and perceptions in many important ways: the value we put on face-to-face interactions, the importance of personal space, communication with loved ones, and much more. Some of these perceptions and social changes may actually outlive the pandemic.

The COVID pandemic raises a vast number of questions for economists, though researchers have mostly focused on advanced economies and on the economic ‘scarring’ that the virus has inflicted. Not all, however, as a few economists have been interested in the likely evolution of cities after the pandemic. They observe that some cities, in particular travel hubs, have been epidemic hotspots, while many others, usually smaller, have been reasonably spared. More rural areas have also been less affected, although with strong variation across regions.

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.