Natia Turnava: “Economic growth figures allow us to say that not only will last year’s setback be completely annulled, but we are returning to a positive trajectory.”
Verdict: FactCheck concludes that Natia Turnava’s statement is HALF TRUE.
The Minister of Economy and Sustainable Development of Georgia, Natia Turnava, speaking about August’s forecasted economic growth rate, stated: “Economic growth figures allow us to say that not only will last year’s setback be completely annulled, but we will return to a positive trajectory.”
According to the preliminary estimates, the real gross domestic product (GDP) growth in August 2021 was 10.3% as compared to the same period of the previous year whilst the average economic growth rate of the first eight months of 2021 is 12.%. As reported by the National Statistics Office of Georgia, there was growth in the following fields as compared to the same period of the previous year: the processing industry, financial and insurance activities, trade, electricity, gas, steam and air conditioning supply, hotels and restaurants, transportation and storage, arts, leisure and recreation. However, construction and mountain mining industries experienced a decline.
It is undisputable that high economic growth is partly stipulated by the base effect, since unprecedentedly stringent pandemic-induced regulations were enforced in March-June 2020 which effectively caused a paralysis of most of the fields of the economy. Questions in regard to the proportionality and the expediency of these restrictions still persist, although, on the other hand, the current growth covers growth in 2020 and as compared to 2019, The economic growth in January-August 2021 constitutes 5.9%. Therefore, the emphasis made by the Minister of Economy and Sustainable Development that 2020’s economic decline will be offset and the general economic trajectory will return to a growth trajectory vis-à-vis the current trends is true. Naturally, given the pandemic, the current economic growth rate is something to welcome. However, such an economic growth rate, as well as the economic growth rate in 2012-2019 prior to the pandemic, is negligent for a developing country like Georgia and insufficient to achieve the goal of poverty reduction.
Therefore, the assessment that this trajectory is positive is not true and FactCheck concludes that Natia Turnava’s statement is HALF TRUE.
Graph 1: Economic Growth Rate (%) Monthly Dynamic (Compared to Relevant Months of the Previous Year) and Economic Restrictions Stringency Index in 2020-2021
Source: National Statistics Office of Georgia, Oxford’s Coronavirus Government Response Tracker