International support
Georgian authorities have mobilized US$ 3.0bn financing from IMF and other international partners (WB, EU, EBRD, EIB, ADB, etc.) to respond effectively to COVID-19 pandemic associated economic crisis. Georgia’s long-lasting ties with these institutions, prudent economic policymaking of recent years and country’s aspiration to democratic changes made this support from good friends possible. Out of this funding, US$ 1.5bn is earmarked for public sector and US$ 1.5bn for private sector. IMF’s financing is c. US$ 400mn, from which US$ 200mn will be made available immediately to the budget and US$ 100mn to NBG in 2H20 and another US$ 100mn in 2021. With this support, we estimate that stimulus in 2020 will be substantial at 11-15% of GDP, which will help to finance health and macroeconomic stabilization measures.
Coronavirus
The first case of coronavirus in the country was confirmed on 26 February, linked to travelers from Iran. As of 22 April, 408 cases were confirmed, of which 97 recovered and 5 died. 5,160 people are currently quarantined (mostly at hotels which is funded by government and some are placed at home). Georgia has responded the virus outbreak promptly. Before international flights were banned entirely on 18 March, travel was initially banned from China and Iran. Full lockdown was introduced on 21 March for a month – to limit Easter gathering at church on 19 April. The recent peak in new daily cases was on 16 April, and there is some optimism that the peak might be over as only few gathered at church on Easter. Importantly, Georgia has one of the lowest active coronavirus cases globally at 10 per 100,000 persons. We think that containment of the virus in May-June will allow an economy to function relatively normally and could make us more optimistic about recovery dynamics.
