EaP COVID-19 Bulletin No 7: Economic and social impacts

Michael Emerson, Denis Cenusa, Tamara Kovziridze, Veronika Movchan, Artem Remizov, Shahla Ismayil, Benyamin Poghosyan, Andrei Yahorau

All the Eastern Partnership states, with the exception of Georgia, see disturbingly high rates of new infections and deaths, contrasting with both Western Europe and the Balkan states where the peaks have passed. Belarus, Moldova and Ukraine (as Russia also) sees sustained fast rising levels of new infections and deaths, whereas in Armenia and Azerbaijan the trends are accelerating even faster.


Our special survey of how the COVID-19 is impacting the economic and social situation shows:

  • Severe economic damage everywhere: losses 2020 mostly 4 to 6%, but worse outcomes feared. 

  • Trade flows are sharply hit with reductions of the order of 10 to 30%.

  • Budget balances deteriorate, by about 5 to 6% of GDP in the two cases for which there are data.

  • Banking systems remain sound in most cases, but with Azerbaijan experiencing exceptional difficulties. 

  • Public health systems cope in Georgia and Belarus, but difficulties in Armenia, Azerbaijan and Moldova.


Georgia, notable for its success in blocking COVID-19, achieved these medicinal results only at sharp and immediate economic costs. On the other hand Belarus abstained from lockdowns, and has suffered less immediate economic damage, but infections continue to rise fast and the ultimate costs to the economy will mount up. Armenia, Moldova and Ukraine see very strong pressures to avoid renewed lockdown measures, with risks of mounting costs. But Azerbaijan has been obliged now to introduce a renewed strict lockdown.   

Are there two model ‘curves’ waiting to be clarified? In a first case, quick and robust lockdown action imposes heavy short-term costs, but allows the economy to recover earlier with less overall losses; in a second case, lockdown measures are mild or ineffective, and immediate economic costs are less, but end up being higher. A year or two still needed to confirm.