Socio-economic problems remain significantly challenging for Georgia. Specifically, in 2020, 21.3% of the Georgian population fell under the absolute poverty line. To support the most vulnerable within society, states ordinarily provide diverse social assistance, sometimes including subsistence allowance. In Georgia, the subsistence allowance program provides financial aid to the country’s poorest families, which is determined by the Social Service Agency rating system. The lower a family’s rating, the poorer their financial position. Recent studies have however indicated that the program does not help beneficiaries to get out of poverty and instead encourages them to maintain a low income in order to receive the allowance. Moreover, the Georgian government plans to significantly reform the program in the nearest future. According to the planned reform, instead of providing money directly, families will be given job opportunities to improve their financial positions. Before changes are made within the program, we take a closer look at the dynamics and structure of the population to have been receiving the subsistence allowance over the last five years. 

In February 2022, the number of persons receiving a monthly salary increased by 7% compared to the corresponding period of 2021 and by 3% compared to the corresponding period of 2020. In February 2022, the average share of persons receiving a monthly salary up to 600 GEL amounted to 25.5%, which was 3 percentage points less than the corresponding period of 2021, and 7 percentage points lower than the corresponding period of 2020. In February 2022, the average share of persons receiving a monthly salary of more than 2,400 GEL amounted to 15.7%, which was 2.8 percentage points more compared to the corresponding period of 2021, and 4 percentage points higher than the corresponding period of 2020. In February 2022, the number of persons receiving a monthly salary higher than 9 600 GEL, increased by 37% compared to 2021 and 50% compared to 2020.

In this issue we will discuss the hotel price dynamics of winter destinations in Georgia. According to the Georgian National Tourism Administration (GNTA), Mtskheta-Mtianeti and Samtskhe-Javakheti have been among the top visited regions in winter season, largely due to major ski resorts (Gudauri and Bakuriani) being located there. Throughout 2020, the YoY HPI was negative for both regions, with a more pronounced YoY decline in Samtskhe-Javakheti. As 2021 wore on, hotel prices increased significantly and from December 2021 to February 2022 the HPI in Mtskheta-Mtianeti averaged 23.5%, while for Samtskhe-Javakheti it was 15.2%. The average monthly hotel prices were higher in Mtskheta-Mtianeti region compared to Samtskhe-Javakheti from January 2019 to February 2022. In particular, during winter months the average hotel price in Mtskheta-Mtianeti was 175 GEL, which was 12.9% higher compared to Samtskhe-Javakheti (155 GEL).

In Georgia, the average cost of a room in a 3-star hotel was 140 GEL per night in February 2022, while the average cost of a room in a 4-star hotel in Georgia was 234 GEL per night and the average cost of a room in a guesthouse was 113 GEL per night. The average cost of a room in a 5-star hotel in Georgia in February 2022 was 416 GEL per night. In Tbilisi, the average price was 556 GEL, followed by Kakheti - 482 GEL, Samtskhe-Javakheti - 389 GEL and Guria - 387 GEL.

According to a survey of Georgian economists, the economic climate in the country in the first quarter of 2022 has worsened compared to the fourth quarter of 2021 but has improved compared to the first quarter of 2021. In the covered period, the surveyed Georgian economists issued a negative assessment of Georgia’s present economic situation. For the first quarter of 2022 the present economic situation was deemed to have worsened compared to the fourth quarter of 2021, albeit to have significantly improved compared to the first quarter of 2021. The surveyed economists’ predictions for Georgia’s economic situation for the next six months were even more negative. In fact, their expectations for this period were lower compared to their predictions made in the fourth quarter of 2021, but higher compared to the ones made in the first quarter of 2021.

In recent years, the number of international students has been increasing worldwide. For instance, according to UNESCO data from 2015 to 2019, the number of international students increased from 4.8 million to 6.1 million. Moreover, studies have illustrated that international students, directly and indirectly, contribute to the host countries’ economies through tuition fees, living costs, transportation, travel, and other aspects. In this issue, we overview the dynamics of foreign students in Georgia and their financial contribution to the country’s educational sector.

The number of international travelers increased by 471.2% in January 2022, compared to the same period of 2021, and declined by 62.3% compared to the same period in 2019. Meanwhile, the number of international visitors increased by 424.4% (2022/2021) and declined by 59.5% (2022/2019), and the number of international tourists increased by 455.7% (2022/2021) and declined by 46.5% (2022/2019). In January 2022, the Hotel Price Index (HPI) showed a significant 5.3% increase in prices compared to 2021, with the highest price increases recorded in Samtskhe-Javakheti (32.8%) and Mtskheta-Mtianeti (20.6%) regions. The number of employees in the HORECA industry increased steadily from 2016 to 2019 with an average annual growth rate of 10.1%. However, in 2020 the number of employees dropped by 33.2%. Even though some positive trends have emerged since Q2 of 2021, the number of employees in the industry is still well below pre-pandemic levels.  The nominal average monthly salaries of employees in the HORECA industry also increased steadily throughout the 2016-2019 period. Since the pandemic began, salaries have been declining significantly. However, since Q2 2021, salaries recorded a considerable YoY increase, which can be explained by the high inflation rate, partial alleviation of restrictions, and higher demand in the HORECA industry.

In Georgia, the average cost of a room in a 3-star hotel was 132 GEL per night in January 2022, while the average cost of a room in a 4-star hotel in Georgia was 237 GEL per night and the average cost of a room in a guesthouse was 107 GEL per night. The average cost of a room in a 5-star hotel in Georgia in January 2022 was 441 GEL per night. In Kakheti, the average price was 567 GEL, followed by Tbilisi - 524 GEL, Samtskhe-Javakheti - 487 GEL and Adjara - 362 GEL.

In this bulletin, we discuss the positions held by Black Sea countries in various international rankings (indicators and indices). This helps us to understand and assess how those states are performing in different areas, to detect what similarities and differences can be found between the countries of the region, as well as to compare the performance of Black Sea countries with that of the rest of the world.  

PMC Research Center has launched a new periodic newsletter entitled Macro Overview.  It 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.