Economist Beso Namchavadze publishes an extensive post on Facebook regarding the economic growth in April and makes an explanation. As he writes, the fact that there is a high growth compared to last April, when a lockdown has been announced, is not surprising.
According to him, a more interesting fact is that the economy grew by 21% in April of this year, compared to April 2019 (the period before the pandemic).
“When the number of tourists is still down by 78% compared to April 2019, the curfew and some other COVID-regulations are still in force, how the economy has grown by 21%?
Preliminary data might be adjusted later, but it will not change significantly.
The main drivers of 21% growth are government subsidies to the economy (social assistance, business grants, increased funding for capital projects, etc.) and export growth, which are due to the rapid recovery of other countries from economic crises. In April 2021, exports increased by 22% compared to April 2019.
However, we must not forget that this increase is quite costly. Behind 21% growth, there stands a state debt, which is grown up to 65% (the money with which the government "boosted" the economy), depreciated GEL and high inflation”, Beso Namchavadze writes.
According to him, he will be happier if the state starts paying off debts, the annual inflation goes down to 3% and the country will have at least 8% economic growth.
According to the report on economic growth, Georgian economy grew by 44.8% in April of this year. At the same time, economic growth was 8.1% in January-April.
