Company News

Georgian economy contracts at annual 5.6% rate in January-August

TBILISI, Oct 1 (Reuters) - Georgia’s economy contracted at an annual 5.6% in the first eight months of 2020 as measures to curb the spread of the coronavirus took their toll, preliminary data showed on Thursday.

In August alone, gross domestic product (GDP) shrank by 5.3% year-on-year after contracting 5.5% in July. In August a year ago, GDP grew by 5.8%. Almost all sectors shrank apart from mining metals, which grew.

Georgia’s economy expanded 5.2% in 2019, up from 4.8% in 2018. This year, the government had expected it to expand 4.5%, before the coronavirus started to spread. The economy is now expected to contract by 4% this year.

International financial institutions, which have also revised growth forecasts downwards, have pledged support, and some have disbursed funds to help Georgia cope with the impact of the pandemic.

The European Bank for Reconstruction and Development (EBRD) said on Thursday that it expected Georgia’s economy to shrink 5.5% in 2020, hit hard by the pandemic’s effect on travel and tourism, before rebounding around 3.5% in 2021.

In May, the EBRD projected Georgia’s GDP to contract 5.0% this year and to grow 5.5% in 2021.

Georgia has reported 6,192 cases of the virus and 39 deaths. (Reporting by Margarita Antidze; Editing by Kevin Liffey)