Georgian PM pledges $606 million to help economy in coronavirus crisis

TBILISI (Reuters) - Georgia will put 2 billion lari ($606 million) from its state budget toward helping the economy through the coronavirus pandemic, its Prime Minister Giorgi Gakharia said.

The South Caucasus country of 3.7 million people had reported 115 coronavirus cases as of Wednesday, with no deaths.

“This is the help that will be directed to the maintenance of jobs, to the maintenance of companies, to the ongoing production of companies and to the maintenance of current businesses,” Gakharia said during a briefing.

Georgian authorities have said that the coronavirus crisis is likely to threaten the former Soviet country’s economic growth forecast of 4.5% this year, but not by how much.

The economy expanded by 3.7% year-on-year in January-February, down from 4.1% in the same period of 2019, although this does not reflect Georgia’s measures aimed at preventing the spread of the coronavirus, which were implemented in March.

Gakharia said that an additional 351 million lari for the healthcare system would be allocated from the state budget.

The government will fund three months payments for electricity and gas consumption to Georgians who used less than 200 kilowatts of electricity and 200 cubic meters of gas a month in March, April and May.

Around 20 million lari had been accumulated in a special fund that had been set by Georgian private companies, while international financial institutions had also pledged support.

The World Bank has already approved a 45 million euro loan last week to support the country’s economic growth and help mitigate the impact of the coronavirus crisis.

The International Monetary Fund said on Tuesday it was working with Georgia to provide support under the ongoing arrangement as well as through additional financing, but did not specify an amount or the timing of any disbursement.

“Besides limiting the impact of the shock, IMF financing should also catalyze donor support,” Mercedes Vera Martin, the IMF mission chief for Georgia, said in a statement.

Editing by Alexander Smith