Sozar Subari: “There is an economic crisis in the whole world but Georgia, with a 10% economic growth, turned out to be the most successful on its way to overcome this crisis.”
Verdict: FactCheck concludes that Sozar Subari’s statement is a LIE.
Resume:
Georgia’s average economic growth rate for the first nine months of 2021 is 11.3%. However, the higher economic growth rate in 2021 is partially stipulated by the base effect. In 2020, the real economy contracted by 6.8% which partially resulted in a higher economic growth figure in light of lifting restrictions in 2021 and the restoration of a slackened total demand. This high economic growth effect in 2021 is often referred to in Georgia’s political or expert community as the “spring effect.” In addition, an acceleration of the economic growth rate is partially attributable to the inconsistent lifting of regulations as a result of which Georgia topped the world in terms of coronavirus deaths per 100,000 people.
Since Sozar Subari speaks about economic recovery, it is only natural that an analysis of his claims requires taking the 2020 base effect into account. If the IMF’s forecast (7.7% growth) comes true, Georgia will be ranked 76nd in terms of economic recovery as compared to 2019 with its 0.3% recovery rate whilst if the Government of Georgia’s forecast (10%) comes true, Georgia will be ranked 40ფ44th with a 2.5% recovery which still contradicts Mr Subari’s statement that Georgia is the most successful on its way to overcome the crisis. Therefore, FactCheck concludes that Sozar Subari’s statement is a LIE.
Analysis:
Georgian Dream Political Council member, Sozar Subari, speaking about Georgia’s economic growth dynamic, stated: “There is an economic crisis in the whole world but Georgia, with a 10% economic growth, turned out to be the most successful on its way to overcome this crisis.”
According to the preliminary estimates of the National Statistics Office of Georgia, the real gross domestic product (GDP) growth was 6.9% in September 2021 as compared to the same period of the previous year whilst the average figure for the first nine months of 2021 is 11.3%.
Recently, the authorities are making frequent references to the double-digit economic growth figures. However, the higher economic growth rate is largely stipulated by the base effect since unprecedentedly stringent pandemic-related measures were imposed in March-June 2020 which basically paralysed many economic fields. The higher growth figures are registered vis-à-vis those periods under lockdown and, therefore, this makes the average figure higher as well. In 2020, the real economy contracted by 6.8% which resulted in a higher economic growth figure in light of lifting restrictions in 2021 and the restoration of a slackened total demand. This year’s economic growth effect is often referred to in Georgia’s political or expert community as the “spring effect.”
Graph 1: Real GDP Growth (As Compared to the Same Period of the Previous Year) Quarterly Dynamic
Source: National Statistics Office of Georgia
According to the International Monetary Fund’s forecasts, Georgia’s economy will grow by 7.7% in 2021. Of note is that the IMF’s initial growth forecast was 3.5%, although the higher than expected economic recovery dynamic as compared to 2020 led to a sharp improvement of the economic growth forecasts. According to the forecast of the Ministry of Finance of Georgia, the country’s economy will grow by 10% in 2020 which is 3.3 percentage points higher as compared to the previous forecast.
Naturally, is still unknown what the actual economic growth rate will be in 2021. According to the International Monetary Fund’s forecasts, Georgia will be ranked 18th with its 7.7% economic growth rate. If Georgia’s economy grows by 10%, as forecasted by the Ministry of Finance, Georgia will be ranked 10th in the world in terms of its economic growth rate. On the other hand, however, Georgia was ranked 141th in terms of its economic growth rate in 2020. Since Sozar Subari speaks about economic recovery, it is only natural that an analysis of his claims requires to take the 2020 base effect into account. If the IMF’s forecast (7.7% growth) comes true, Georgia will be ranked 76nd in terms of economic recovery as compared to 2019 with its 0.3% recovery rate whilst if the Government of Georgia’s forecast (10%) comes true, Georgia will be ranked 40th with a 2.5% recovery which still contradicts Mr Subari’s statement that Georgia is the most successful on its way to overcome the crisis. In addition, the pandemic context also needs to be taken into account. In particular, an acceleration of the economic growth rate is partially attributable to the inconsistent lifting of regulations as a result of which Georgia topped the world in terms of coronavirus deaths per 100,000 people.
