კონფერენცია

∘ Khatuna Todua ∘
THE CORONAVIRUS CRISIS: THE BIG CHALLENGES AND NEW OPPORTUNITIES FOR GEORGIAS ECONOMY

Summary

The coronavirus is having a profound and serious impact on the global economy. More than 200 countries now have confirmed cases of COVID – 19, including Georgia.

The coronavirus (COVID-19) outbreak has brought considerable human suffering and major economic disruption.

Indeed, the more the SARS-CoV-2 virus spreads around the globe – there are more than 2,7 million confirmed cases of the related COVID -19 disease, the greater concern over not just our health, but our livelihoods.

Just how big an impact can a pandemic like COVID -19 have on the global economy? The latest economic projections suggest it will be dramatic, especially with a potential vaccine still several months away, at best. Indeed, the international Monetary Fund (IMF), recently predicted the pandemic would incite the worst economic slump since the Great Depression.

While experts can estimate what the economic fallout from a pandemic such as the coronavirus will be, the precise impact will vary based on how many people are affected, how severely it hits, and which societal interventions are necessary to contain its spread.

The direct disruption to global supply chains, weaker final demand for imported products and services, and the wider regional declines in international tourism and business travel are the adverse consequences of the coronavirus spread on the world economy.

Thus, the Covid-19 impact on the global economy will cause a sharp slowdown in the global growth. The global Gross Domestic Product growth of 2020 is projected to decrease to 2,4 per cent or even to 1,5 per cent which is half the rate projected prior to the coronavirus outbreak.

The containment measures in advanced economies have already started impacting less developed countries, including Georgia, through lower trade and investment.

The impact of the coronavirus is rippling through Georgian economy, but it might take a few months to fully see the fallout in data that track economic performance in Georgia.

One of the likely consequences of the coronavirus epidemic could be reduced remittances from abroad, which represent a significant share of Georgian fiscal revenue.

Yet, despite the negative trends, there are some positive ones as well, which can limit the negative impact on Georgia's weak economy.

One of them is Georgia's expected economic growth of more than 4 % for 2020. Given the above negative factors and considering the possibility that negative effects will remain for most of 2020, it is likely that the growth will still remain at least near the 3,5 % mark.

Indeed, according to the projections which are set by the ministry of Economy of Georgia, the possible economic losses for the country would, under the current circumstances, likely amount to only $ 11 million per month.

Though there is an expectation in Georgia of immediate economic losses from travel bans and likely diminution of trade with China and the immediate neighbors, unless there are trade and travel limitations with Turkey and Russia, long term positive perspectives will limit the existing negative effect on the economy of Georgia.

The coronavirus crisis has its roots in an economy of Georgia, yet, Georgia, with bold measures can turn it into the good opportunity driving income and wealth of Georgians to a high.

In fact, with favorable circumstances and oil prices, Georgia has a lot better chance of rejuvenating the momentum in the economy.

Ivane Javakhishvili Tbilisi State University Paata Gugushvili Institute of Economics International Scientific C O N F E R E N C E S "ECONOMY – XXI CENTURY"

E ISSN 2587 - 4691	∘ Khatuna Todua ∘ THE CORONAVIRUS CRISIS: THE BIG CHALLENGES AND NEW OPPORTUNITIES FOR GEORGIAS ECONOMY Summary The coronavirus is having a profound and serious impact on the global economy. More than 200 countries now have confirmed cases of COVID – 19, including Georgia. The coronavirus (COVID-19) outbreak has brought considerable human suffering and major economic disruption. Indeed, the more the SARS-CoV-2 virus spreads around the globe – there are more than 2,7 million confirmed cases of the related COVID -19 disease, the greater concern over not just our health, but our livelihoods. Just how big an impact can a pandemic like COVID -19 have on the global economy? The latest economic projections suggest it will be dramatic, especially with a potential vaccine still several months away, at best. Indeed, the international Monetary Fund (IMF), recently predicted the pandemic would incite the worst economic slump since the Great Depression. While experts can estimate what the economic fallout from a pandemic such as the coronavirus will be, the precise impact will vary based on how many people are affected, how severely it hits, and which societal interventions are necessary to contain its spread. The direct disruption to global supply chains, weaker final demand for imported products and services, and the wider regional declines in international tourism and business travel are the adverse consequences of the coronavirus spread on the world economy. Thus, the Covid-19 impact on the global economy will cause a sharp slowdown in the global growth. The global Gross Domestic Product growth of 2020 is projected to decrease to 2,4 per cent or even to 1,5 per cent which is half the rate projected prior to the coronavirus outbreak. The containment measures in advanced economies have already started impacting less developed countries, including Georgia, through lower trade and investment. The impact of the coronavirus is rippling through Georgian economy, but it might take a few months to fully see the fallout in data that track economic performance in Georgia. One of the likely consequences of the coronavirus epidemic could be reduced remittances from abroad, which represent a significant share of Georgian fiscal revenue. Yet, despite the negative trends, there are some positive ones as well, which can limit the negative impact on Georgia's weak economy. One of them is Georgia's expected economic growth of more than 4 % for 2020. Given the above negative factors and considering the possibility that negative effects will remain for most of 2020, it is likely that the growth will still remain at least near the 3,5 % mark. Indeed, according to the projections which are set by the ministry of Economy of Georgia, the possible economic losses for the country would, under the current circumstances, likely amount to only $ 11 million per month. Though there is an expectation in Georgia of immediate economic losses from travel bans and likely diminution of trade with China and the immediate neighbors, unless there are trade and travel limitations with Turkey and Russia, long term positive perspectives will limit the existing negative effect on the economy of Georgia. The coronavirus crisis has its roots in an economy of Georgia, yet, Georgia, with bold measures can turn it into the good opportunity driving income and wealth of Georgians to a high. In fact, with favorable circumstances and oil prices, Georgia has a lot better chance of rejuvenating the momentum in the economy.