The Business Association of Georgia (BAG) Index is a joint product of the Business Association of Georgia, PMC Research Center and the ifo Institute for Economic Research. The BAG Index summarizes the BAG Business Climate, BAG Employment Barometer and BAG Investment Environment, which are calculated according to the assessments of the top managers of BAG member businesses and companies in their corporate group. In Q1 of 2023, additional questions regarding the employees’ salary dynamics were integrated into the survey. BAG and PMC Research Center publish the BAG Index on a quarterly basis from Q4 2019. For the previous reports of the BAG Index, please, visit the following link: https://bag.ge/ge/bag-index

Trends in information and communication technologies (ICT) are shaping the future amid existing global challenges. Among major global ICT trends are the growing prevalence of artificial intelligence (AI) and machine learning (ML), increased mobility, and advanced connectivity. It is essential for Georgia’s economic development that it keeps pace with these worldwide advances, establishes its own niche, and specializes in certain aspects of ICT. The capabilities of countries to use, adopt, and adapt innovations and digital transformation will play a crucial role in their shaping future economic development. That is why it is crucial to analyse the challenges and opportunities with regard to the development of the ICT sector in Georgia

In February 2023, the number of persons receiving a monthly salary increased by 4.9% compared to the corresponding period of 2022 and by 11.6% compared to the corresponding period of 2021. From September 2022 to February 2023, the total number of vacancies published on jobs.ge amounted to 39,565, which was 20.4% higher compared to the corresponding period of 2021-2022. In February 2023, compared to January 2023, the total number of vacancies published on jobs.ge decreased by 3.5%. From September 2022 to February 2023, a total of 7,065 vacancies were published in the field of finance, statistics, which was 40.6% higher than the corresponding period of 2021-2022 and 192.5% higher compared to the corresponding period of 2020-2021.

In 2022, the number of outbound visits made by Georgian residents tripled compared to 2021 and reached 1.7 million, equating to 71% of the pre-pandemic figure. In 2022, a significant proportion of outbound visits were to Turkey (54%), followed by Russia (14%). Notably, the number of outbound visits to Russia exceeded the pre-pandemic figure by 49% with the highest quarterly increase (143%) coming in Q3 of 2022 compared to Q3 of 2019. The most popular purpose of outbound visits in 2022 was shopping, representing 41% of total visits, while this number was equal to 29% in 2019. The share of shopping also increased in total expenditure of outbound visitors, reaching GEL 759 million, marking a 16% increase compared to 2019.

In Georgia, the average cost of a room in a 3-star hotel was 140 GEL per night in February 2023, while the average cost of a room in a 4-star hotel in Georgia was 236 GEL per night and the average cost of a room in a guesthouse was 116 GEL per night. The average cost of a room in a 5-star hotel in Georgia in February 2023 was 392 GEL per night. In Kakheti, the average price was 562 GEL, followed by Tbilisi – 489, Samtskhe-Javakheti – 454, and Guria – 339.

In recent years, the number of international students has been increasing worldwide, with their contributions to host countries’ economies growing accordingly, and Georgia is not an exception. As shown in PMC RC’s study, total expenses incurred by foreign students, their foreign relatives, and friends in Georgia in the 2020-2021 academic year exceeded US$132 million. Understanding the dynamics of foreign students and foreign language programs in Georgia is crucial to ensure further growth and investment in the education sector. Therefore, this bulletin overviews the dynamics of foreign students in Georgia and their financial contribution to the country’s education sector.

The main findings of the survey of Georgian economists conducted in the first quarter of 2023 are: The surveyed Georgian economists positively assess Georgia’s present economic situation. Though their predictions for Georgia’s economic situation for the next six months are negative. The surveyed Georgian economists’ prediction for real GDP growth for 2023, on average, is 5.5%. Almost 83% of the surveyed economists think that Russia’s war in Ukraine currently represents a high or very high threat to the Georgian economy. Meanwhile, a skills mismatch was assessed as a very high threat by nearly half of the surveyed economists (44%). One third of respondents (33%) think that the “GOG Vision 2030 - Development Strategy of Georgia” partially responds to the challenges and problems faced by Georgia but none of the respondents think that the strategy fully addresses them. Regarding the EU Commission’s analytical report on Georgia’s alignment with the EU acquis, the majority of surveyed economists (75%) think that introducing improvements with respect to the environment and climate change mitigation in line with the EU acquis will be challenging or very challenging.

The unprovoked Russian invasion of Ukraine has brought economic and political turmoil to the world, taking numerous civilian lives as well. Since the war broke out, more than 8 million Ukrainians have been recorded as having emigrated across Europe, making it crucial to understand their impacts on the economy and in particular the labor market of host countries and Ukraine. Therefore, this bulletin overviews the dynamics of displacement from Ukraine and analyzes their current and potential economic and social impacts on Ukraine and host countries.

Macro Overview aims to review the recent trends and developments of the Georgian economy and sets the stage for what is to come in the approaching months.   Macro overview highlights some of the key indicators in Georgian economy such as inflation, economic growth, and employment. It also explores external sector of the economy, overviewing trends in tourism, trade, remittances and FDI. The publication consolidates and includes analytical pieces from the PMC Research Center’s periodic newsletters, such as economic outlook and indicators series, monthly tourism update, black sea bulletin, employment tracker. It also includes insights about the expectations of businesses and economists about the future of the Georgian economy from our Georgian economic climate and bag indexes.

In 2022, the number of international visitors reached a total of 3.9 million, which is 176% higher compared to 2021 and amounts to 65% of the pre-pandemic (2019) total. In 2022, the highest number of visitors to Georgia came from Russia, amounting to 915,000. Russia was followed by neighboring countries: Turkey (711 thousand) and Armenia (531 thousand). In 2022, the income from international travel reached USD 3.5 billion, which is 8% higher compared to 2019. The recovery was gradual but by Q4 of 2022, it had exceeded the corresponding figure for Q4 of 2019 by 46%. In terms of nationality, the income from Russian travelers was the highest in 2022 and amounted to USD 891 million (25.3% of total income), which is 15% higher compared to 2019. Meanwhile, income from Ukrainian travelers exceeded the pre-pandemic number by 52% and reached USD 282 million.