19.Nov .2020 11:45

PMC Research Center: Georgia’s economic situation for the next six months is assessed negatively

PMC Research Center: Georgia’s economic situation for the next six months is assessed negatively
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PMC Research Center published a report on “Georgian Economic Climate”. According to the report, in the fourth quarter of 2020, Georgian economic climate did not change significantly, compared to the previous quarter.

In this period, Georgian economists assessed Georgia’s present economic situation negatively. The assessment of present economic situation in this quarter slightly improved compared to the third quarter of 2020, but worsened compared to the fourth quarter of 2019.

In the fourth quarter of 2020, Georgia’s economic situation for the next six months was also assessed negatively by Georgian economists. Furthermore, expectations for the next six months deteriorated slightly compared to both the third quarter of 2020 and the fourth quarter of 2020.

In the fourth quarter of 2020, Georgian experts assessed the COVID-19 impact on Georgian economy, economic recovery and government’s actions.

Majority of experts (82%) implied that the long-run economic recovery of Georgia will depend on the recovery of global economy. Moreover, dependence of the recovery of Georgian economy on the recovery in Russia and Turkey were each emphasized by 64% of experts.

Economists were also asked to assess on a scale from 1 (not problematic at all) to 5 (very problematic) particular issues for companies in the context of pandemic.

It is worth noting that 36% of respondents identified foreign sales market as “very problematic”, while 18% of respondents stated that financing/liquidity is “not problematic at all” . Furthermore, experts assessed risk of insolvency of companies in different sectors of Georgian economy.

Accommodation and food service activities was the only sector where the majority of experts (36%) assessed the risk of insolvency as “very high”. It is worth noting that 18% of respondents stated that the risk of insolvency of companies in financial and insurance activities was “very low”. 46% of surveyed economists stated that fiscal stimulus package imposed by the government was sufficient, while 54% implied that more could have been done.

In addition, experts were asked to identify government initiatives that should be extended in 2021. 91% of economists stated that provision of liquid funds by National Bank of Georgia should be continued. Accelerated VAT refunds and tax deferrals for businesses were each selected by 64% of experts.