Giga Bokeria: “The number of employed individuals dropped by 45,000 in 2016-2019 and by 33,000 in the second quarter of 2020. The economy contracted by 12% in the second quarters and a GEL 6 billion loss was inflicted.”
Verdict: FactCheck concludes that Giga Bokeria’s statement is MOSTLY TRUE.
Resume: In 2016-2019, the number of employed individuals decreased by 43,600 whilst in the second quarter of 2020 the number dropped by 33,000 as compared to the same period of the previous year. In this part of the statement, Mr Bokeria’s statement is basically accurate and there is only a slight mismatch between his and the official figures.
In the reference to the drop in the GDP, the real GDP dropped by 12.3% in the second quarter of 2020 as compared to the same period of the previous year according to the National Statistics Office of Georgia which does correspond to the first part of Mr Bokeria’s statement. However, in the reference to an absolute decrease, a 12.3% GDP drop corresponds to a GEL 1.3 billion shrinking of the real GDP instead of GEL 6 billion as claimed by the MP. If we take the entire six months of data, the real GDP contraction is only GEL 1.1 billion (from GEL 19 billion to GEL 17.9 billion).
Supposedly, Giga Bokeria’s calculations vis-à-vis a GEL 6 billion loss is based on multiplying 12.3% (the economic drop in the second quarter of 2020) by GEL 50 billion (2019’s nominal GDP) as 50*12.3%=6.2 which is a substantially wrong approach. On the one hand, using the relative figure or real growth together with a nominal absolute figure is meaningless and, on the other hand, there is no ground to extrapolate a certain quarter’s growth rate over an entire year.
Analysis
At the plenary session of the Parliament of Georgia, European Georgia – Movement for Freedom MP, Giga Bokeria, addressed the Minister of Economy and Sustainable Development, Natia Turnava: “Officially, in 2016-2019, the number of employed individuals dropped by 45,000 and 33,000 less people are employed in the second quarter of 2020 as compared to the previous year. The economy contracted by 12% in the second quarter. What is the threshold you need to seriously consider reducing the burden for entrepreneurs and citizens? Your response reads that you managed to keep GEL 300 million in the economy. When we have a GEL 6 billion loss, how does GEL 300 million offset that loss?”
According to the data of the National Statistics Office of Georgia, in the second quarter of 2020 the employment rate dropped by 0.5 of a percentage point to 55.9% as compared to the same period of the previous year. There were 1,684,000 employed individuals in the second quarter of 2020 and the number of employed individuals dropped by 33,000 as compared to the same quarter of the previous year. The pandemic and related regulations are believed to be behind the jobs losses in the second quarter, although unemployment has been one of Georgia’s biggest challenges even prior to the outbreak of the pandemic. The number of employed individuals has been declining annually in the country since 2016. In 2016-2019, the number of employed individuals decreased by 43,600 (see FactCheck’s article).
According to the data of the National Statistics Office of Georgia, Georgia’s real GDP shrank by 12.3% as compared to the same period of the previous year which is equivalent to a GEL 1.25 billion loss. In the second quarter of 2020, the real GDP amounted to GEL 8.9 billion and reached GEL 10.2 billion in the second quarter of 2020.
