Georgia’s economy is unlikely to recover to pre-COVID levels until late 2022, reads the report of the World Bank,

“Emerging and developing economies in the Europe and Central Asia region are expected to grow by 3.6% this year, as a recovery in exports and stabilizing industrial commodity prices partly offset a resurgence of the pandemic late in 2020 and a recent flareup in new cases, says the latest edition of the World Bank’s Economic Update for the region, released today.

The modest growth in 2021 follows a contraction of 2% in 2020 due to COVID-related disruptions. The contraction was smaller than anticipated due to a stronger than forecast recovery in Turkey and resilience in Russia, the region’s largest economies. Rebounding industrial production, increased export external demand, higher commodity prices and fiscal and monetary support contributed to this outcome. Hardest hit are economies that are heavily dependent on services and tourism, since social distancing measures and mobility restrictions led to sustained weaknesses.

Regional growth is expected to strengthen to 3.8% in 2022, as the effects of the pandemic gradually wane and trade and investment gather momentum. The outlook remains highly uncertain, however, and growth can be weaker if the pandemic takes longer than expected to fade; there are delays in vaccination; external financing conditions worsen due to a rise in global interest rates or deterioration in investor sentiment; or due to geopolitical tensions.

The COVID-19 pandemic has hit Georgia hard. Mobility restrictions, a sudden halt to international tourist arrivals, and weak external demand drove an estimated economic contraction of 6.2% in 2020. The poverty rate increased by an estimated 5.4% points. Job and income losses were severe. The fiscal deficit and public debt rose above statutory levels as the crisis put pressure on fiscal and external balances. Georgia’s economy is projected to expand to 4 percent in 2021 and then to firm to 5% in 2022. Despite this improvement, output is unlikely to recover to pre-COVID levels until late 2022, in part owing to a subdued outlook for international tourism over the forecast horizon. The recovery is subject to considerable downside risks, including from delayed vaccinations, additional or extended COVID-19 restrictions, tightening global financial conditions, and prolonged political tensions”, - reads the report.