Nearly zero international travelers, reduced export, minimum economic activity is simply translated to forgone revenue for the Georgian economy. Moreover, beyond comparison, government expenditures and the current budget deficit are last but not least constituent of the cost of the global pandemic to the Georgian economy.
“As international travel was broadly banned and Georgia resumed international flights with only a limited number of countries, the number of international travelers declined by 94.9% y/y. At the same time, revenues from international travelers fell nearly to zero in Q3 2020. In this quarter alone Georgia lost 1,127 million USD from tourism revenues,” Giorgi Mzhavanadze, Senior Researcher at the ISET Policy Institute, told BMG.
Budget data in Q3 2020 fully reflected the impact COVID-19 had on the economy, says Mzhavanadze, adding that total revenues to the general budget amounted to 2,887 million GEL, a 13.4% y/y decrease.
In his words, the support package includes healthcare and virus management costs, targeted direct and indirect income transfers to affected households, tax relief, the introduction of credit guarantee schemes for businesses, and payroll support, etc. “As a result, current governmental expenditures increased by 33.3% y/y in Q3 2020 (and amounted to 3,472 million GEL). This growth was mainly driven by higher spending on social benefits (+47.8% y/y)”.
“Overall, in Q3 2020, the budget deficit amounted to 1,671 million GEL, 6.5 times higher than in the same period of the previous year. According to a revised version of the State Budget, the deficit would constitute 8.5% of GDP in 2020,” Mzhavanadze told.
