Georgia’s unprecedented economic growth in its post-pandemic path to recovery - CNN publishes an extensive article with this headline.
“Located at the crossroads of Europe and Asia, Georgia holds a key geographic location. Before Covid-19 swept across the world, the country was thriving. In 2019, it registered a record number of international arrivals and boasted an economy characterized by an impressive growth rate, averaging 4.9% between 2017-2019.
As with most countries around the world, Georgia was hard hit by the pandemic, and in 2020 economic contraction amounted to 6.2% GDP. However, in February 2021, the Georgian government, led by newly appointed Prime Minister, Irakli Gharibashvili, took decisive action to ensure access to Covid-19 vaccines was made available to all citizens. Consequently, restrictions were lifted, gradually and safely, leading to unprecedented economic growth.
Gaining economic momentum
As 2021 progressed, the Georgian economy began to rebound strongly; growth hit 30% in the second quarter, averaging 12.7% in the first half of the year. Consequently, real GDP significantly exceeded pre-pandemic levels and economic activity improved in every sector, from manufacturing and construction to services and tourism related activities.
Due to these positive developments, the International Monetary Fund (IMF) increased its economic growth projection for Georgia, stating that the country will not only see fast economic recovery in the medium-term, but will have the highest economic growth rate among regional and European countries, amounting to 5.8%. Economic growth will be supported by infrastructure spending and the uninterrupted continuation of structural reforms to bolster productivity and enhance private sector-led growth.
In line with improving economic activity, Georgia’s external merchandise trade has also exceeded its pre-pandemic indicators. Between January and September 2021, the country’s export soared by 24%, year-on-year – while domestic export exceeded pre-pandemic levels by almost a third.
“Within Europe we have one of the most outstanding – very strong – economic growth. Let me remind you that 12% is the current indicator of economic growth in Georgia and we are quite confident that by the end of 2021, the economy will achieve a two-digit annual growth rate, says Prime Minister Gharibashvili. “Thus, we will carry out many more projects from the following year. We will further promote medium to small business, agriculture, and will keep much closer relation with the private sector at large to create a common synergy and develop our country at a greater scale”
According to the International Financial Organisations and Credit Rating Agencies, the strong economic recovery trends and overperformance of tax revenue will not only support Georgia’s macroeconomic stability, but ensure the credibility of its policies. Thanks to some incredibly positive developments in economic activity, the Georgian government has managed to significantly reduce the fiscal deficit and public debt the country accumulated as a result of the pandemic.
Since the pandemic, Georgia has demonstrated solid resilience. Its government has strategically implemented policy efforts alongside strong fiscal discipline, and subsequently been able to ensure, not only solid recovery, but create solid foundations for future prosperity.
By prioritizing structural reforms to focus on long-term development goals that aim to transform the economy and deliver inclusive access to economic opportunities, Georgia is primed to take on whatever future challenges are thrown in its development path”, - reads the article.