The paper represents the economic crisis in Georgia caused by the covid-19 pandemic. The negative impact of the crisis on Georgia’s economy is significant and by the end of 2020 it was already possible to express its effect in specific numbers and therefore, to make predictions and recommendations. The economic crisis primarily affects the developing countries, where the economy is experiencing a real sector deficit, negative balance of foreign trade that is balanced by attracting the tourism sector and foreign direct investments. Considering the Georgia’s less developed economy the crisis pushes government to use monetary and fiscal instruments for stimulating the economy in the short and medium run, while in the long-term period it faces a wide range of challenges including local and international economy.