Posted: 4 months ago

Galt & Taggart Managing Director on Economic Forecasts After the Pandemic

"It must be noted, that situation is quite unusual. The economist, when asked about the forecast, likes to paraphrase some of the parameters, the historical rupture, what caused the crisis, looking for what could be the next hurdle, at this point, this is a stranger topic, that has not been resolved yet, we are talking about the the virus, "Galt & Taggart managing director Otar Sharikadze said in an interview with Business Morning.

Speaking about the impact of the spread of coronavirus on the Georgian economy, the analyst noted that the country had met the pandemic as ready as possible.

"We do not know how long it will last, what way will it carry on, there are many positive predictions, there are predictions that it will last longer than we are predicting, there are many different factors. It is difficult for us to talk about direction and forecast more clearly.

One thing is for sure, the sooner it obeys, or the sooner the situation gets under control, the sooner the situation in Georgia will be restored. It has to be said that Georgia has seen significant growth in the last decade, the country has changed dramatically, even the readiness to meet this crisis is quite different.

To imagine it happening 10 years ago, we would have been in much worse condition - even in the medical field, the food supply, the condition of the banks, we were in a different situation altogether. We have a different reality today, the country will handle the situation positively. By the time we get to the point where there is some breakthrough in coronavirus, I mean worldwide, not just in Georgia.

At the same time, the government, the National Bank and the private sector are mobilizing very quickly. The most important thing in this case is mobilization and unity. There has never been such a moment in history as we have now - we depend on each other, because if I follow certain rules, you must also protect my efforts to make some sense, if we do not do it all, it will lose sense. Therefore, the fact that the joint response and we were involved in this reaction was a meeting, asking the right questions, what to do, what we think, what the predictions will be, many important steps have already been taken. If there is some complication, I think the country is ready to deal with all this at this stage, "Sharikadze said.

Sharikadze also made some predictions about when the economy will regain its lost position.

"The prognosis is the following, we do some scenarios and it depends mainly on how long the virus becomes controllable. If we take an optimistic scenario that for example in 2-3 months, it is controlled by testing or isolation at the end of May, we say there will be a revival by the end of the year, Because the trend was very good.

In Georgia 20% of GDP is comes from tourism,and historically, we admit that when we take the example of other countries, when there were cataclysms, tourism is a sector that soon returns to its usual rhythm, so if the threat is lifted not only in Georgia but globally, people love traveling, people love Fun, eating, being with friends, thus traffic will be restored very soon.

The second part is money transfers and we will have a significant decrease in this, we will have a decrease in exports as well, consumption is falling, and on the other side there are some very balancing factors, such as imports. There will be a big drop in imports, a drop in consumption. On the other hand, the government has taken steps to raise funds from outside, which is crucial. To date, a lot of international institutions have allocated funds, the World Bank has added 50 billion, and 5 billion. In fact, it is necessary to have access to external resources, because we do not know how long this process will take.

Therefore, I think that if we get this virus under control, we might have a slight increase in the fall, even in the summer, or go to a factor of 0, if the situation remains the same in the second half of the year, the economy will be reduced, "he said.