Transportation and logistics sector in Georgia  is a vital pillar of the economy, facilitating domestic and international trade. Notably, Georgia's strategic location along the Middle Corridor enhances its significance as a key transit hub connecting Europe and Asia. In 2023, Georgia's transportation and storage sector experienced moderate growth, with its contribution to GDP increasing by 5.1% despite facing challenges like disruptions in trade with Russia. Although the sector’s share of total gross output declined slightly (-0.8 percentage points, YoY), it remains vital, contributing 6.5% to the national economy's overall output. Looking ahead, Georgia's transportation and logistics sector is expecting further growth and development. Despite recent challenges, the sector's strategic location along the Middle Corridor presents promising opportunities for expansion. With ongoing efforts to enhance infrastructure and connectivity, Georgia is well-positioned to strengthen its role as a key transit hub between Europe and Asia.

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.