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Georgian government releases pessimistic economic scenario

Georgian government releases pessimistic economic scenario
Georgian government releases pessimistic economic scenario

The budget project of 2020 is appended with three macro-economic scenarios of the Finance Ministry of Georgia: Basic, Pessimistic, and Optimistic alternatives for economic development.

The basic scenario says that tourism incomes will halve in 2020 due to border restrictions.

The government says that the decline will be 1.65 bln USD in tourism. The pessimistic scenario reads that tourism incomes will drop by 80% in 2020.

The scenario relies on the hypothesis that the epidemic will acutely continue, and the strict regime will still be necessary.

"The pessimistic scenario reflects a stress-test of how a macro-fiscal scenario can pose in the conditions of harder economic recession and fiscal load,'' the documents read.

Against the background of nominal GDP, tax incomes will decrease in the case of the pessimistic scenario. The negative scene says that the taxes will reduce by 742 mln GEL than – in the basic scenario, while the difference will be 1,650 GEL compared to 2019.

As the Finance Ministry's basic scenario reports, the pandemic-related events will significantly influence the regional economies and Georgia's partner countries to impact Georgia's economy via trade channels.

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