At the plenary session of the Parliament of Georgia held on 18 September 2013, Zurab Melikishvili, MP from the Parliamentary Minority, stated:  “…We declare that the current state of the economy is bad. The economy is going through a recession…”

FactCheck

inquired about the accuracy of the evaluation claiming the present economic situation to be equal to a recession.

In comparison with recent years the growth rate of the economy has seen a decrease. Real GDP growth rate has dropped to 1.7% in 2013 [based on the data for the first seven months] while throughout the last three years the economy has been growing at a rate of 6-7%.

Despite the evident low rates of economy growth, assessing the situation as a recession would be premature. The clearest manifestation of a recession

would be a decrease of GDP (not GDP growth rate) throughout two quarters or a longer period. To put it in different words, the Real GDP growth rate would have to be represented by negative numbers during a period of two or more quarters.

Basing the evaluation of a recession solely upon a decline of GDP is not an entirely flawless approach but is still considered to be the prevailing one.

As observed in the data published by GeoStat, in 2013 the economy has seen, even if small, evidence of economic growth. The average GDP growth rate in the period between October and July amounted to about 2.0% while the same indicator in the first seven months of 2013 was at 1.7% (data for August and September is still not published).

Conclusion In 2013 Real GDP growth rates were evidently lower than in previous years. Therefore, the MP rightly points to the unfavourable state of affairs in the economy. Nevertheless, assessing the current situation as a recession would be inaccurate since the economy has been growing in 2013, however low those growth rates may be. Consequently, we conclude that Zurab Melikishvili’s statement:  “...We declare that the current state of the economy is bad. The economy is going through a recession...” is HALF TRUE.