April 24, 2020 / 10:35 AM / a month ago

Georgia expects its economy to contract 4% in 2020: prime minister

TBILISI (Reuters) - Georgia announced a 3.5 billion lari ($1.1 billion) support package on Friday of which more than 2 billion lari will go towards shoring up its economy against the impact of the coronavirus pandemic, Prime Minister Giorgi Gakharia said on Friday.

Presenting the plan to his government, Gakharia said the economy was expected to contract 4% this year and lose 1.8 billion lari in revenue. The government had projected 4.5% growth in 2020.

The plan set out by Gakharia allocates 2.110 billion lari to support businesses and the wider economy, 1.035 billion lari for welfare support, and 350 million lari for healthcare and medical needs.

The support measures draw on $3 billion of emergency funding to be provided by international financial institutions and donors, which Ghakharia announced on April 14, which Georgia appealed for to help it balance its budget for this year.

“It became clear that we lacked 3.9 billion lari to balance the budget,” he said.

Georgia earlier this week extended state of emergency till May 22. It includes a night curfew from 9 p.m. till 6 a.m., the closure of restaurants, cafes and most shops, a suspension of public transport and a ban on gatherings of more than three people. Grocery stores, pharmacies and petrol stations remain open.

Gakharia said that a nationwide ban on movement of private vehicles would be lifted from April 27, while other restrictions would be removed gradually.

The South Caucasus country of 3.7 million has so far reported 431 confirmed cases of the coronavirus, with five deaths.

Editing by Raissa Kasolowsky

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