Issue 117: Fiscal Effects of COVID-19 in Georgia

PMC Research forecasts that budget deficit as a % of GDP will increase from 3.1% to 9.8% in the optimistic scenario, while in the less pessimistic and very pessimistic scenarios it will amount to 11.2% and 14.1%, respec­tively.                                        

Recommendations:

1. Planned budget spending should be reprioritized to provide space for COVID-19-related expenditure;
2. Fiscal measures should be targeted to assist the hardest-hit households and firms. The government should ignore lobbying pressure from different sectors and businesses seeking benefit from fiscal policy package;
3. Effective public financial management is key to safeguarding against fiscal risks and enhancing the Government’s capacity to respond to the crisis.