<<Back

Coronavirus in Georgia, 4 – 10 May. Reopening the economy, gov’t unveils tourism support plan

Photo: Nino Alavidze / Agenda.ge

The rate of coronavirus infection in Georgia continued to decline this past week, with the number of daily infections decreasing from around 14 per day to just six.

The number of people who have lost their lives to coronavirus in Georgia remains low at 10, although the country did report towards the end of the week a death in its youngest victim yet – a 45-year-old woman in Gori who had underlying medical conditions.

The country has recorded a total of 635 coronavirus cases as of May 10, and the number of those recovered, 309, may soon outweigh the number of people currently being treated for the virus.

Opening up
As case numbers drop, some cities on lockdown have opened their doors, such as Kutaisi and Batumi which reopened on May 4. Lockdown regulations will be lifted from Tbilisi on May 11, and Rustavi following on May 14 following nearly a month-long ban on entry or exit into the country’s four largest cities. Marneuli, one of the earliest and worst hit centers of the outbreak in the country, will have lockdown lifted on May 18 after more than six weeks.

Word on the curfew is that the matter will be reviewed once the state of emergency comes to an end on May 22.

Business, economy
Construction companies, repair, auto and car wash services were allowed to return to work at the start of the week, while a number of businesses and shops will be opening their doors on May 11, with most shops, aside from malls, clothing and shoe stores, receiving permission to begin operations again.

This is the second time the Georgian government’s plan to reopen the economy has been pushed ahead at a faster rate than anticipated. The government says the increased tempo is due to the fact that the epidemiological situation in the country remains satisfactory and under control.

Inflation continues to grow, with food prices soaring 16% y/y in April, with fruit (45%), dairy and eggs (23%) and sugar, jam and other sweets (17%) leading the spike, followed closely by meat (15%), fish (14.9%) and vegetables (14%). Overall year-on-year inflation in April came to 6.9%.

Commenting on April inflation in a monetary policy report, National Bank of Georgia Chair Koba Gvenetadze said “inflation is expected to remain above the target for a longer period of time than previously thought.”

Global food prices, however, saw a sharp fall off in April. The reverse trend in Georgia is likely due to the sharp devaluation of the Georgian lari.

Meanwhile, the government has promised to present post-crisis plans for other sectors of the economy by May 17, with a focus on rural and agricultural support, construction and development, and education.

Helping tourism get back on its feet
The government presented a plan on May 7 to have the country begin receiving foreign tourists again by July 1, while the domestic tourism market will come back online on June 15. A concept plan of ‘safe tourist zones’ has already been adopted.

The Georgian government says with this plan, the country will be one of the first across the world to open its borders to tourists.

The country will cooperate with foreign nations to establish ‘safe corridors’, i.e. allowing for the transit between countries who have managed to flatten the coronavirus infection rate, and have low prevalence of the virus at home.

As part of this effort, Georgia will be rebranded and receive a new image as that of a “safe destination”, Economy Minister Natia Turnava said. “We have internationally recognized success in fighting the coronavirus, and this is a new, competitive advantage that we have gained.”

Other steps to help the tourism sector will include a full exemption from property taxes in 2020, and companies operating in the tourism sector will have their income taxes suspended for a period of nine months.

The government will also help hotels that with an annual turnover of less than 20 million GEL, and offer 80% co-financing from the state for the service of loans up to 5 million GEL.

Restaurants and food facilities will also receive assistance in the form of exemption from property tax until 2020, and credit-guarantee schemes.

Georgia will have a role to play in helping determine how tourism evolves on the curtails of the COVID-19 epidemic, as earlier this week it was announced that a ministerial of the World Tourism Organization will be held in Georgia in September.

Turkish Airlines plans to begin offering commercial flights in June to 19 destinations, including Georgia, while Qatar Airways will begin flights to Georgia starting July 1. A more detailed overview of what flights will resume to the country will be made available by the government in late May.