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Georgia says it will lose over $1 billion because of Ukraine

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By Reuters

– Georgia is likely to lose $1.0 billion to $1.2 billion in economic output owing to Russia’s military intervention in Ukraine and fall short of its 6% growth target, the head of parliament’s finance and budget committee said on Friday.

“Russia and Ukraine are our main trading partners,” Irakli Kovzanadze told the TV channel TV Pirveli, according to Russia’s TASS news agency. “Russia is second, and Ukraine is fifth or sixth place.”

He said the Ukrainian crisis would reduce not only exports but also tourism income and remittances from abroad.

“I think Georgia’s economy will lose $1-1.2 billion,” Kovzanadze said.

Although growth was likely to fall short of 6%, he said there would be no problems implementing the state budget.

Georgia’s gross domestic product expanded 10.6% in 2021 as it recovered from the effects of the coronavirus pandemic after a 6.2% drop in 2020, according to preliminary data.

The International Monetary Fund estimated Georgia’s GDP at around $18 billion in 2021, in U.S. dollar terms.

Russia sent tens of thousands of troops into Ukraine in what it called a special operation to degrade its southern neighbour’s military capabilities and root out people it called dangerous nationalists.

The West has imposed sweeping economic and financial sanctions on Russia in an effort to force it to withdraw its forces, but the conflict is also set to ravage Ukraine’s economy.