Georgia is a significant contributor to the global hazelnut industry, ranking among the world’s leading countries in both shelled and in-shell hazelnut exports.
Nearly all (97.9%) Georgian hazelnuts are produced in the following five regions: Samegrelo (42.2%); Guria (20.7%); Kakheti (12.9%); Adjara (12.0%); and Imereti (10.5%). Among these regions, the price of hazelnuts is highest in Kakheti, followed by Samegrelo and Imereti.
Most of the hazelnuts produced in Georgia are exported. The leading importer countries of Georgian hazelnuts are Italy and Germany.
The global demand for honey is increasing, driven by consumers' growing preference for natural and organic sweeteners over sugar and other health-damaging artificial substitutes and the global honey market is expected to grow from $8.53 billion in 2022 to $12.69 billion by 2029, at a CAGR of 5.83%.
Considering that Georgia is known as the land of the oldest honey discovered, and has suitable natural conditions and biodiversity for high-quality honey production, the development potential for the honey production sector in Georgia is high.
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
Since the spread of COVID-19 at the end of 2019, the ensuing pandemic has caused an economic crisis impacting global food availability and food security. The effects of the pandemic have been aggravated by the war between Russia and Ukraine, two prominent players in global food and agriculture.
In Georgia, since July 2021, the YoY price increase for both wheat flour and wheat bread has shown a dramatic increase. The YoY price increase for wheat flour reached an all-time maximum of 36.5% in July 2022, while for wheat bread, it peaked in June 2022 at 36.3%.
Finally, considering Georgia’s high dependence on imports from Russia and low self-sufficiency in terms of domestic wheat production, it is crucial that the dialogue between potential trade partners, such as Kazakhstan and Turkey, be intensified in the long run to diversify the wheat market and ensure food security for Georgia.
In this issue, we overview major economic indicators in the construction sector, construction permits, commercial bank mortgage loans for real estate purchases, and construction-related price indices. In addition to that, the results of the BAG business index survey regarding the sales, sales prices, employment, and factors hindering business activity in the construction sector are also provided.
Financial institutions play a pivotal role in the development of the Georgian economy. Indeed, while the financial system remains dominated by commercial banks, microfinance institutions (MFIs) are the biggest non-bank lending institutions based on portfolio volume.
The PMC RC periodically publishes sector snapshots on state of MFI sector in Georgia and in this bulletin the state of sector during the period of 2018-Q1 2022 will be overviewed.
The marine fishing cluster in Georgia is mainly based in Poti in the Samegrelo-Zemo Svaneti region. The primary activity for companies therein is fishing in the Black Sea. Currently, enterprises mainly deploy outdated, Soviet-era vessels in their operations, which are in acute need of upgrading. However,significant measures have been taken to tackle this pressing challenge.
This issue is largely based on the “Marine Fishing Cluster Diagnostic Study in Samegrelo-Zemo Svaneti Region” published by PMC Research Center for United Nations Industrial Development Organization (UNIDO) under the “EU Innovative Action for Private Sector Competitiveness in Georgia (EU IPSC).”
The poultry sector in Georgia enjoyed stable growth between 2007 and 2020 (i.e. since the global outbreak of bird flu had abated in 2006). The sector is the only agricultural sector to contribute VAT payments to the Georgian economy. The sector, as well as most other sectors of the economy, has been affected by the country’s move toward approximation with European standards, especially in recent years. This issue is largely based on the "Poultry Cluster Diagnostic Study in Kvemo Kartli Region," published by PMC Research Center, for United Nations Industrial Development Organization (UNIDO) under the “EU Innovative Action for Private Sector Competitiveness in Georgia (EU IPSC).” Find the full publication here: https://bit.ly/3kSILkL
The wine industry in Georgia has experienced strong growth over the past decade in all key indicators such as exports, turnover, and employment and salaries (measured both in GEL and in USD). The financials of the sector have also looked impressive during this time.
PMC Research has launched a new periodic publication entitled Sector Snapshots. Each issue focuses on a specific sector of the Georgian economy, observing developments with respect to key indicators of the given sector as a whole, the sector’s dynamics, its role in the overall economy, and, finally, financial indicators of companies within that sector.
The publication will produce valuable insights for businesses engaged in the covered sectors, as it lays out the trajectory of development for each sector and its possible financial bottlenecks, thereby contributing to more informed and efficient decision-making.
In the first issue of our new publication, we focus on Georgia’s microfinance sector.
In 2017-2019 new regulations on microfinance institutions (MFIs) entered into force, which significantly altered the landscape of the industry;
Between Q1 2017 and Q4 2020, the number of MFIs and employees in the sector fell, with the former dropping to 40 and the latter to 4145 by Q4 2020 (52% and 16% decrease, respectively)
In Q4 2020, MFIs in Georgia held 1.48 bln GEL of assets and 0.98 bln GEL of liabilities. In this period, the consolidated assets and liabilities of MFIs increased, compared to Q4 2019 with a growth of 7% and 9%, respectively. Compared to Q1 of 2017, figures increased by 6% and decreased by 1%, respectively;
In 2020, gross income (revenue) of MFIs decreased, compared to 2019, and dropped by 10% to 332.6 mln GEL, while net income increased to 44.8 mln GEL. Moreover, the net income margin increased by 14 percentage points and reached 14%;
By the end of 2020, portfolio of loans issued by MFIs amounted to 1.18 bln GEL, while number of loans in portfolio amounted to 0.66 mln loans, which represented 8% increase and 16% decrease, respectively, compared to the figures by the end of 2018.