The International Monetary Fund has published a policy tracker that summarizes the key economic responses governments are taking to limit the human and economic impact of the COVID-19 pandemic. The tracker covers 193 economies, including Georgia.

According to the IMF report, Georgia has reported 144 active positive cases and only 2 deaths April 6, 2020, the sixth week into the outbreak of COVID-19. The government has declared a national state of emergency and adopted containment measures, including social distancing, lock down of high-risk districts, closure of border crossing, travel ban for foreign visitors, quarantine for nationals returning to Georgia, closure of shops (other than groceries and gas stations) and schools.

“Other forms of economic activity, including tourism, has come to a standstill. Tighter financial conditions have resulted in portfolio outflows from domestic government securities. The Georgian Lari has depreciated by 14 percent vis-à-vis the dollar since March 6.

The government announced a GEL 2 bn (4 percent of GDP) support package on April 1 (which enhanced the GEL 1 billion package announced on March 13). The initial package included suspension of property and income taxes for the tourism sector until November 2020, provision of interest subsidy to small and medium sized hotels, increase in credit guarantee scheme, acceleration of VAT refunds, and higher capital spending. The initiative also includes government payments for gas, electricity, water and cleaning bills for poor segments of the population who consume less than 200 kw of electricity and 200 cubic meters of natural gas March-May, 2020. GEL 351 million will be directed to health spending including lab testing and quarantine expenditures as well as increased costs associated with hospitalization, medical treatment, and medical supplies. Unemployment subsidy will be provided to those who lost jobs due to the recent developments at the amount of GEL 150 per month per person for 6 months. This will be directed to those employees who used to pay the income tax and stopped it, as the businesses were closed. Those businesses that retain employees will also get a subsidy; The government will provide a subsidy for imports of 9 basic commodities (incl flour, wheat, pasta, rice, oil, sugar, milk powder, beans, buckwheat) and will also create a stock pile of these commodities at a total cost of GEL50 million. The government is considering to enact a credit guarantee scheme to support economic recovery during the post COVID-19 period.

The National Bank of Georgia (NBG) announced measures to support capital and liquidity in the banking sector. Banks have been asked to evaluate the quality of the loan portfolio; on-site inspections have been suspended; and a moratorium on fines was introduced where a breach emerged due to the crisis. The NBG kept its policy rate steady in its March MPC meeting as the nominal effective depreciation would impact inflation dynamics. The NBG has closed office operations of currency exchange booths and other payment service providers, among others.

NBG has sold $100 million in three interventions in the foreign exchange market, to prevent disorderly depreciation,” the IMF said.