According to the baseline scenario of the National Bank of Georgia, Georgia’s economic growth will be 4% in 2021, but by the pessimistic scenario, the increase will be 1%.
Archil Mestvirishvili, Vice-President of the National Bank of Georgia declares if the pandemic continues longer, then economic recovery will be difficult.
"In the baseline scenario, we have a 4% growth. We also have more pessimistic scenario that the pandemic will last longer. Tourism recovery will be less, as well as the economic situation in the region is deteriorated, then we have to tighten the monetary policy rate. In this case, economic growth will be around 1% this year”, Mestvirishvili declares.
These two scenarios of economic development are also discussed in the monetary policy report published by the NBG.
The central bank estimates that in order to achieve 4% growth, it is important to increase foreign demand, which includes exports and tourism. According to these calculations, this year Georgia must receive 870 million USD from tourism, which is 25% of tourism revenue gained in 2019.
Georgia ended 2020 with an economic drop of 6.1%. The higher-than-expected recession was triggered by new Lockdown announced late last year.
