MACROECONOMIC REVIEW – 2021 Authors: Yaroslava Babych, Archil Chapichadze, Nino Sarishvili

In the same time, the COVID-19 pandemic left the economy weaker in several key areas: higher government debt/GDP ratio (60.7% in 2020), inflation pressures (9.6% annual average in 2021) and higher, albeit decreasing, CA deficit (12.4% of GDP in 2020 and 9.8% of GDP in 2021 according to the latest NBG data). [...] The variations were driven in part by the economic uncertainties related to the pace of vaccination both within the country and in its partner states, accompanied with the slow recovery of the labor market. [...] The demand was driven by the realization of pent-up demand after the reopening of the economy, strengthened by credit activity and continued fiscal stimulus. [...] On the foreign exchange market, GEL was depreciating against USD in the first months of 2021, but by the end of the year the dynamics reversed, and GEL started to gain value. [...] The geographical diversification of Georgian imports improved as the share of top ten trading partners in the total imports of Georgia amounted to 67% in 2021, compared to 69.9% in 2020.