“The Great Lockdown”, referring to the period in which COVID-19 containment measures were put in place worldwide, has had a significant toll on the global economy. In the specific case of Ukraine, even though the country entered the crisis in better macroeconomic condition than in previous global crisis in 2008, its economy is still expected to be hit hard. In this issue, we provide an overview of the impacts of the ongoing pandemic on the Ukrainian economy that are already visible and try to supply an economic forecast for the country for the remainder of 2020 and for 2021, looking at the performance of each economic sector in the process.  

In the fourth quarter of 2020, Georgian economic climate did not change significantly, compared to the previous quarter. In this period, Georgian economists assessed Georgia’s present economic situation negatively. The assessment of present economic situation in this quarter slightly improved compared to the third quarter of 2020, but worsened compared to the fourth quarter of 2019. In the fourth quarter of 2020, Georgia’s economic situation for the next six months was also assessed negatively by Georgian economists. Furthermore, expectations for the next six months deteriorated slightly compared to both the third quarter of 2020 and the fourth quarter of 2020.

The COVID-19 pandemic, and the ensuing economic shock, has prompted governments all around the globe to act swiftly and decisively to mitigate the health and economic impacts of the crisis. Each country has responded in its own way, and it is useful to look at these different responses to identify good practices. In this issue, we look broadly at countries in Eastern Europe and Central Asia, and present three case studies of Georgia, Moldova, and Serbia respectively, including an analysis of the fiscal measures these countries have taken and an overview of the impacts of the pandemic.

The number of international travelers declined by 94.2% in September compared to the same period of 2019, while the number of inter- national visitors fell by 93.6% and the number of international tourists fell by 92.2%. Georgia experienced a fall of more than 90% in the number of foreign arrivals every month since April, compared to the corresponding period of 2019; In the first three quarters of 2020, revenues from international travel amounted to US$499 mln, which is 81% lower than for the same period of 2019; The price changes in Adjara, Guria, and Samtskhe-Javakheti are the most representative of tourism’s decline. In September 2020, the year over year Hotel Price Index decreased by 39.2% in Guria, 33.4% in Adjara, and 24.3% in Samtskhe-Javakheti; Looking at countries that have reopened tourism quickly with no restrictions, some have managed to recover a sizable portion of their arrivals, such as Albania, while others, like North Macedonia and Serbia, have not been so successful. Indeed, the decrease in the number of arrivals to the latter two countries has been comparable to that in Georgia, which has maintained significant travel restrictions.

In Georgia, the average cost of a room in a 3-star hotel was 124 GEL per night in September 2020, while the average cost of a room in a 4-star hotel in Georgia was 221 GEL per night and the average cost of a room in a guesthouse was 70 GEL per night. The average cost of a room in a 5-star hotel in Georgia in September 2020 was 335 GEL per night. In Samtskhe-Javakheti, the average price was 440 GEL, followed by Guria - 433 GEL, Tbilisi - 430 GEL and Kakheti – 345 GEL.

In the very first edition of PMC Research Center Ukraine’s Economic Outlook and Indicators, we present an overview and analysis of the dynamics of Ukraine’s main economic indicators over the last decade, such as GDP, inflation, exchange rates, foreign trade, FDI, and remittances.

In August 2020, the number of employees receiving salaries recovered almost fully and stood at only 1% less than the corresponding month of last year; During the period of January-August 2020, the month of May saw the largest drop in the number of employees receiving salaries (a dip of 9% or 74 951), compared to the corresponding period of 2019; The month of April experienced the biggest decline in the number of employees for four out of the five higher-income categories, with the highest decline (23%) recorded in the number of people earning more than GEL 4800 per month; The total average monthly earnings of employees in Q2 of 2020 amounted to GEL 1150.1, which represents a 3% decrease compared to Q2 of 2019; According to the data obtained from HR.ge and Jobs.ge, the drop in demand for labor started in March and reached its peak in April, when HR.ge and Jobs.ge experienced an 87% and 78% year over year (YoY) decline in new vacancies posted, respectively. The YoY growth rates started recovering towards the baseline in May, but then registered a significant decline in August.

The spread of novel coronavirus COVID-19 has resulted in global pandemics, which was followed by an abrupt economic crisis, as economies stood still in order to overcome the threat to people’s lives. In this bulletin, we overview the readiness to the healthcare and economic crisis, the evolution of the pandemic and characteristics of the lockdown for the six countries in the Black Sea Region.

By the end of the second quarter of 2020, loans and deposits, expressed as a percentage of GDP, increased by 3.6 and 4.9 percentage points, respectively, compared to the beginning of the year; By the end of the second quarter of 2020, bank assets, expressed as a percentage of GDP, increased to 98.4%; By the end of July of 2020, the volume of loans was increased by 19%, compared to July of 2019; The average interest rates on loans in January-July of 2020 denominated in national currencies were 0.9 percentage points higher than in January-July of 2019, while the average interest rates on loans denominated in foreign currencies were 0.8 percentage points less; By the end of July of 2020, the volume of deposits in Georgia was increased by 21%, compared to July of 2019; The average interest rates on deposits in January-July of 2020 denominated in national currencies were 1.2 percentage points higher than in January-July of 2019, while the average interest rates on deposits denominated in foreign currencies were 0.4 percentage points less; In January-July of 2020 trade had the highest share of total loans with 29.5%; In January-July of 2020, share of construction in total loans increased by 3.6 percentage points, while share of financial intermediation decreased by 8.2 percentage points, compared to the corresponding period of 2019; According to the World Bank, Georgia’s ratio of non-performing loans to total loans decreased in 2019, compared to 2018, by 0.8 percentage points and dropped to 1.9%; By the end of July of 2020 the rates of dollarization on loans and deposits were increased by 0.3 and 8 percentage points, compared to the corresponding period of 2019. The rates rose to 56.9% and 61.3%, respectively.

The number of international travelers declined by 96.4% in August compared to the same period of 2019, while the number of international visitors fell by 96% and the number of international tourists fell by 95.4%; In the first 8 months of 2020, revenues from travel amounted to $483 mln, which is 78% lower than the same period in 2019; In Q2 2020, compared to Q2 2019, turnover of accommodations declined by 66%, and turnover of food facilities declined by 37%; In August 2020, compared to August 2019, yearly Hotel Price Index decreased by 32.1% in Guria and 21.7% in Adjara; In August 2020, compared to August 2019, the average price of guesthouses in Guria decreased by 58%, while the average price of 3-star hotels decreased by 35%; In August 2020, compared to August 2019, the average price of 4-star hotels decreased by 38%, while the average price of 5-star hotels decreased by 25%. The average prices of guesthouses and 3-star hotels registered a more modest decline.