Georgia Seeks To Buffer Expected 4 Percent Economic Contraction

Georgia has announced a 3.5 billion-lari ($1.1 billion) support package aimed at shoring up the country's economy, which is expected to contract 4 percent this year because of the coronavirus pandemic.

More than 2 billion laris provided in the package will go toward supporting businesses and the wider economy, Prime Minister Giorgi Gakharia said on April 24.

Another 1 billion laris will go toward welfare support, and 350 million laris is included for health-care and medical needs.

Gakharia presented the plan to his government on April 24, saying the economy was expected to shrink 4 percent and lose 1.8 billion laris in revenue. The government had projected 4.5 percent growth in 2020.

The support measures draw on $3 billion of emergency funding to be provided by international financial institutions and donors announced on April 14. Georgia had appealed to the donors for help in balancing its budget for this year.

Georgia earlier this week extended its state of emergency until May 22. It includes a curfew from 9 p.m. until 6 a.m., the closure of restaurants, cafes and most shops, a suspension of public transport, and a ban on gatherings of more than three people. Grocery stores, pharmacies, and gas stations remain open.

A nationwide ban on driving private vehicles will end on April 27, and other restrictions will be removed gradually, Gakharia said.

The South Caucasus country of about 4 million people has so far reported 431 confirmed cases of the coronavirus, with five deaths.

With reporting by Reuters