TBILISI

Georgia’s economy may grow faster than initially expected this year after encouraging growth figures in the first four months of this year and a rise in exports suggested the country was on the path to recovery, officials said.

The ex-Soviet country’s gross domestic product (GDP) grew by 8.1 percent year-on-year in January-April 2021 after contracting 3.6 percent in the same period last year, as the country eased the majority of the restrictions imposed to curb the spread of coronavirus.

“This year’s economic growth will be more than 7 percent, which is calculated according to the pessimistic scenario and optimistically, it can be more than 10 percent,” Irakli Garibashvili the country’s prime minister, told reporters.

“The positive signals and sentiments from the business give us a very optimistic reason that the economic recovery is already happening very fast,” he added.

The government had forecast 4 percent growth this year.

Over the last decade, Georgia became the post-Soviet region’s premier international tourist destination, something on which a huge part of the country’s economy has come to rely. Over nine million international travellers visited the country in 2019, up from two million in 2010, bringing in  – officially – $3 billion in revenue. However, much of the tourism economy is estimated to be in cash, off-the-books transactions.

Closed borders affected the tourism sector dramatically. In a further blow to the industry, the country implemented a series of stringent nationwide lockdown measures, including a 9 p.m. curfew and a ban on large gatherings. But many restrictions were lifted in April and May and the curfew moved to 11 p.m.

Georgia’s finance minister said that the pandemic cost the state budget 7.2 billion lari ($2.3 billion) in 2020 and in the first four months of this year. The tax deficit was 1.9 billion lari.

But despite serious challenges, the economy started to show its first solid signs of recovery in April, when it expanded by a record 44.8 percent, compared with a 16.6 percent contraction a year ago, with a growth recorded in all sectors of the economy except the mining industry.

Foreign trade also showed positive signs, with exports increasing 45 percent year-on-year in May to $340 million. Georgia’s foreign trade turnover increased by 18.2 percent to 5 billion dollars.

“This data gives us hope that the economic growth that has been observed so far will continue, and we expect that economic growth will be at least 6.5 -6.7 percent this year,” Natia Turnava, economic development minister, told reporters.