Impact of anti-pandemic restrictions on economic growth: visible and invisible loss (ანტიპანდემიური შეზღუდვების გავლენა ეკონომიკურ ზრდაზე: ხილული და უხილავი დანაკარგი)

Abstract

The article is an attempt to estimate the economic loss caused by the restrictions introduced in 2020 against the Covid-19 pandemic. The article discusses preliminary estimates of economic growth in European countries in crisis are the flagships of the global tourism industry (Spain, Italy, Greece and France). Against this background, the question of whether it is appropriate for the government to choose the development of tourism as the main strategic priority is gaining more legitimacy. The originality of the approach used in the article for estimating economic losses is reflected in the assessment of visible and invisible losses. Real GDP in 2020 decreased by 6.2 percent compared to 2019, amounting to GEL 2.482 billion in 2015 in monetary terms. In other equal conditions, based on trend of 2017-2019, GDP in 2020 calculated at 2015 prices, could have increase by 4.4 percent compared to 2019 and its total volume would reach 42.1 billion 2015 GEL. The volume of unattainable growth is GEL 1.758 billion in 2015 monetary terms. In total, the overall loss of the Georgian economy due to anti-pandemic restrictions in 2020 was 4.240 billion GEL of 2015, which at the average exchange rate of the same period is 1.868 billion US dollars. GEL 2.482 billion or 59 percent of total losses comes from the real decline, while GEL 1.758 billion or 41 percent is the share of an unattainable growth. 46 percent of the overall losses fall on the three sectors, namely the Hotels and Restaurants, Transport and Trade. In relative terms, the overall downturn rate of the Georgian economy caused by the Covid-19 pandemic is 10.6 percent, of which 6.2 percentage points is the visible decline and 4.4 percentage points is the unattainable growth.