The European Bank for Reconstruction and Development (EBRD) has cut its 2020 economic growth forecasts for Armenia, Azerbaijan and Georgia as they are hit by the coronavirus crisis, but says it expects a recovery in the South Caucasus countries next year, Reuters reports.
Georgia's gross domestic product (GDP) growth is expected to fall 5.5% in 2020, before rebounding to around 5.5% in 2021, the EBRD said, adding that the economy would be severely impacted as transport restrictions hit travel and tourism.
"With tourism receipts normally amounting to nearly one-fifth of GDP, the negative impact will be widespread across many sectors," the bank said in a regional economic prospects report.
“Recovery would depend on a “gradual relaxation of domestic measures to contain the virus and a return to normality during the second half of the year”, the bank said in a regional economic prospects report.
The EBRD had forecast a growth of 4.5% for Georgia's GDP in November 2019.
For Armenia, the EBRD forecast that the economy would shrink 3.5% in 2020, but then expand by 5.5% in 2021.
GDP in oil-rich Azerbaijan is expected to contract by 5% in 2020 amid declining foreign and domestic demand, but should rebound by 3.5% next year, said the EBRD.