In the third quarter of 2020, Georgian economic climate has slightly improved. In this period, Georgian economists assessed Georgia’s present economic situation negatively; Moreover, the assessment of present economic situation in this quarter has improved compared to the second quarter of 2020, but worsened compared to the third quarter of 2019. In the third quarter of 2020, Georgia’s economic situation for the next six months has also been assessed negatively by Georgian economists. Furthermore, expectations for the next six months have enhanced compared with second quarter of 2020, but deteriorated slightly compared with the third quarter of 2019.
In Georgia, the average cost of a room in a 3-star hotel was 135 GEL per night in June 2020. While the average cost of a room in a 4-star hotel in Georgia was 223 GEL per night and the average cost of a room in a guesthouse was 73 GEL per night. The average cost of a room in a 5-star hotel in Georgia in June 2020 was 322 GEL per night. In Tbilisi, the average price was 471 GEL, followed by Kakheti - 327 GEL, Samtskhe-Javakheti - 279 GEL and Adjara – 273 GEL.
Using various assumptions, in Q3 of 2020, the maximum capacity of domestic tourism expenditures is to replace 33% of revenues from international tourism;
Using various assumptions, total revenues generated from tourism (both, domestic and international) in 2020 could amount to $1730 mln, which is 44.1% of the corresponding figure in 2019;
Domestic tourism in Georgia reopened on June 15th, while the reopening of borders is postponed to the near future;
The number of international travelers declined by 94.6% in May compared to the same period of 2019, while the number of inter- national visitors fell by 94.1% and the number of international tourists fell by 93.8%;
In June 2020, hotel prices do not provide an accurate guidance of the situation in accommodation market due to the fact that the market for accommodations is just starting to recover from the COVID-19-induced crisis.
Due to the COVID-19 pandemic, global FDI is expected to fall by 30-40% in 2020 (UNCTAD), while the decrease in Georgia is forecast at 19% (IMF);
Net FDI inflows have been decreasing in Georgia since 2017, based on both, yearly and Q1 data;
Net FDI inflows in Georgia experience volatility over time, due to large one-off investment projects;
Georgia has been leading among EaP countries in terms of the share of FDI in GDP in 2017 and 2018;
Net FDI inflows decreased by 41.7% in Q1 of 2020, compared to Q1 in 2019, mainly due to COVID-19 pandemic.
The Government of Georgia introduced various support measures in order to alleviate the burden of the COVID-19 crisis on tourism industry in the period between March and May of 2020.
The Government of Georgia, namely GNTA, operated 84 hotels during the lockdown, which served 19 002 Georgian citizens as a quarantine zone. The total cost of providing quarantine zones from the budget amounted 32.5 mln GEL.
The Government of Georgia, developed mandatory recommendations for prevention of the spread of COVID-19 on June 5th.
In May 2020, hotel prices do not provide an accurate guidance of the situation in accommodation market due to the fact that the market for accommodations is non-existent due to COVID-19 pandemic.
In Georgia, the average cost of a room in a 3-star hotel was 126 GEL per night in May 2020. While the average cost of a room in a 4-star hotel in Georgia was 214 GEL per night and the average cost of a room in a guesthouse was 71 GEL per night. The average cost of a room in a 5-star hotel in Georgia in May 2020 was 362 GEL per night. In Tbilisi, the average price was 534 GELfollowed by Kakheti - 325 GEL and Imereti – 95 GEL.
Number of international travelers decreased by 612 273 (-94.5%), compared to the same period previous year, while number of visitors decreased by 515 440 (-93.8%) and the number of tourists decreased by 321 643 (-92.3%);
Based on GNTA database, in an average registered accommodation facility in Georgia, there are 15 rooms and 37 beds. There are on average 23 rooms and 55 beds in Adjara (highest) and 6 rooms and 15 beds in Samegrelo-Zemo Svaneti (lowest). There are on average 2.4 beds per one room in Georgia. This ratio equals 2.24 in Tbilisi (lowest) and 2.91 in Racha (highest);
Hotel prices do not provide an accurate guide of situation in accommodation market due to the fact that the market for accommodations is almost non-existant due to the COVID-19 pandemic
In Georgia, the average cost of a room in a 3-star hotel was 128 GEL per night in April 2020. While the average cost of a room in a 4-star hotel in Georgia was 209 GEL per night and the average cost of a room in a guesthouse was 68 GEL per night. The average cost of a room in a 5-star hotel in Georgia in April 2020 was 343 GEL per night. In Tbilisi, the average price was 566 GEL, followed by Kakheti - 320 GEL, Adjara – 258 GEL and Samegrelo-Zemo Svaneti - 199 GEL.
Unemployment has remained one of the prioritised issues in Georgian economy since its independence. Moreover, Georgian economy was characterised with high unemployment rates even during periods of economic upturn prior to 2008 global financial crisis. COVID-19 is likely to impact job market and income of people employed, therefore, it is important to consider their pre-pandemic state. This bulletin overviews the unemployment and income figures of 2016-2019. The period of 2016-2019 is characterised with significant trends and issues such as: • Growth in average monthly incomes;• Slight decrease in unemployment rate;• Increased share of hired individuals in labor force;• Slight decrease of share of self-employed individuals in labor force.
PMC Research forecasts that budget deficit as a % of GDP will increase from 3.1% to 9.8% in the optimistic scenario, while in the less pessimistic and very pessimistic scenarios it will amount to 11.2% and 14.1%, respectively.
Planned budget spending should be reprioritized to provide space for COVID-19-related expenditure;
Fiscal measures should be targeted to assist the hardest-hit households and firms. The government should ignore lobbying pressure from different sectors and businesses seeking benefit from fiscal policy package;
Effective public financial management is key to safeguarding against fiscal risks and enhancing the Government’s capacity to respond to the crisis.