Natia Turnava: “According to preliminary forecasts, the economy decreased by 6%. This is a rather gloomy indicator, of course, although this is a part of the world trend.”
Verdict: FactCheck concludes that Natia Turnava’s statement is HALF TRUE.
Resume: In accordance with the World Bank’s definition, Eastern Europe and Central Asia Region consists of Georgia and 22 other countries. Apart from Georgia’s neighbour countries, the region also includes Belarus, Hungary, Poland, North Macedonia, etc. In 2020, Georgia was ranked 16th among the regional countries based on its economic growth rate, losing ten-12 positions as compared to 2018-2019’s ranking. The sharp contraction of Georgia’s economy as well as the deterioration of its ranking among regional peers are largely stipulated by the stringency and the duration of the restrictions imposed by the government amid the pandemic. According to the Government Response Stringency Index, Georgia is ranked second after Romania among the Eastern Europe and Central Asia Region countries. It is natural that countries with longer and stricter regulations had a larger economic contraction as compared to countries with relatively lighter restrictions. Therefore, Natia Turnava’s statement is partially accurate since there is an economic decrease trend both in the region and across the world. However, Georgia’s economic backsliding figures turned out to be more dire as compared to other countries.
Analysis
The Minister of Economy and Sustainable Development of Georgia, Natia Turnava, stated: “According to preliminary forecasts, the economy decreased by 6%. This is a rather gloomy indicator, of course, although this a part of the world trend.”
The world economy contracted as result of the COVID-19 pandemic-induced crisis and the respective restrictions. The economy of the region where Georgia belongs decreased as well. In accordance with the World Bank’s data, the Eastern Europe and Central Asia Region consists of 23 countries in total. Prior to the pandemic Georgia was ranked 7th in this region based on economic performance but was moved up to the 3rd position following improved economic growth indicators. In accordance with the World Bank’s forecasts, all regional economies (except Turkey, Tajikistan and Uzbekistan), including Georgia’s, will contract. Therefore, the economic trend, highlighted in the Minister’s statement, is indeed a downward one. However, tighter restrictions in Georgia as well as the country’s strong dependence on tourism resulted in a sharper contraction of the economy as compared to other countries. As a result, Georgia was ranked 16th based on the economic growth forecast among the countries of the Eastern Europe and Central Asia Region.
Table 1: GDP Growth in Eastern Europe and Central Asia Region Countries, 2020 [1]
Source: World Bank
Such a sharp contraction of Georgia’s economy is largely stipulated by the stringency and the duration of the restrictions imposed by the government amid the pandemic. According to the Government Response Stringency Index, Georgia is ranked second after Romania among Eastern Europe and Central Asia Region countries. According to the Index, countries with longer and stricter regulations had larger economic contraction as compared to countries with relatively lighter restrictions.
Table 2: Government Response Stringency Index
Source: ourworldindata.org
In summary, there is a downward trend for both world and regional economic trends. However, given the stringency and the duration of the restrictions, Georgia’s economy contracted more as compared to these trends and it was reflected on Georgia’s position in the growth ranking of regional countries. Therefore, Natia Turnava’s statement is HALF TRUE.
[1]This group also includes Turkmenistan, although the World Bank has not provided the country’s assessment in the latest forecasts.
[2]As of 2020, only 98 of the United Nation’s 193 member nations recognize Kosovo’s independence and Georgia is not among them.
