The National Bank of Georgia today presented updated macroeconomic scenarios, according to which the NBG forecasts 5% economic growth in 2021. In 2020, according to the National Bank, the Georgian economy will shrink by 5%.
"According to the basic forecast, economic activity will decrease by 5% in 2020, and the situation is expected to improve and the economy is expected to grow in 2021. The restoration of economic activity in 2021 is mainly due to local demand and investment activity. External demand remains weak and only partially restored. The resumption of tourism flows is expected only from the second half of 2021.
Improving economic activity is accompanied by declining unemployment, although potential economic growth is expected to slow in the medium term, driven by a deep recession-induced production capacity and rising workplace safety costs. In addition, the potential growth will also be slowed by structural changes in the economy, which is related to the movement of labor and other productive resources from the pandemic of vulnerable sectors, "- said in a report of the National Bank.
