Our latest Georgian Economic Climate publication offers assessments of various economic developments by Georgian economists.  Assessment of Georgia’s present economic situation was slightly positive, while predictions for Georgia’s economic situation by the end of the next six months were negative. Overall, their outlook was significantly more optimistic compared to the previous reporting period.   Political instability and labor shortage had the greatest impact on the Georgian economy in Q3 2024.   The pause in U.S. assistance “that directly benefits the Government of Georgia” was assessed very negatively in terms of its effects on Georgia’s economy.  Please refer to the full publication for more insights. 

The latest Georgian Economic Climate (Q2, 2024) publication offers assessments of various economic developments by Georgian economists. Assessment of Georgia’s present economic situation was slightly negative, while predictions for Georgia’s economic situation by the end of the next six months were also negative. Political instability and exchange rate fluctuations had the greatest impact on the Georgian economy in Q2 2024. The bill on “transparency of foreign influence” is expected to have a negative impact on the EU accession process, FDI inflows, and currency depreciation.

Our latest Georgian Economic Climate publication offers assessments of various economic developments by Georgian economists. Georgia’s present economic situation was assessed positively. Predictions for Georgia’s economic situation for the next six months were also slightly positive.  Export volumes are forecasted to decline, and import volumes are expected to increase over the next six months compared to 2023. EU candidacy and labor shortage has the greatest impact on the Georgian economy. Additionally, employment and the labor market is the most challenging area when it comes to Georgia’s alignment with the EU standards.

The main findings of the survey of Georgian economists conducted in the fourth quarter of 2023 are: Georgian economists have a positive assessment of Georgia’s present economic situation. Though their predictions for Georgia’s economic situation for the next six months are also positive. 64% of the surveyed economists identified a labor shortage as the most significant threat to the Georgian economy. All of the surveyed economists either agreed or completely agreed with the IMF’s concerns regarding the independence of the NBG. Overall, 76% of the surveyed economists believed that the recent developments surrounding the NBG posed a high or very high threat to the continuation of the IMF’s support program in Georgia.

In this bulletin, which is based on the ifo Institute’s methodology, we discuss Georgia’s economic climate, informed by the assessments of various Georgian economists. The main findings of the survey of Georgian economists conducted in the third quarter of 2023 are: Georgian economists have a positive assessment of Georgia’s present economic situation. Though their predictions for Georgia’s economic situation for the next six months are negative. 93% of the surveyed economists think that a labor shortage currently represents a high or very high threat to the Georgian economy. Almost 78% of the surveyed economists named a high emigration rate as a high or very high threat. With Turkish Lira hitting a record low, 78% of the surveyed economists think that the decreasing competitiveness of domestic products against cheaper imports from Turkey will have at least a high impact on the Georgian economy.  

The main findings of the survey of Georgian economists conducted in the second quarter of 2023 are: Georgian economists have a positive assessment of Georgia’s present economic situation. Though their predictions for Georgia’s economic situation for the next six months are negative. 63% of the surveyed economists think that Russia’s war on Ukraine as well as labor market problems like skills mismatch and labor shortage (lack of qualified personnel) currently represent a high or very high threat to the Georgian economy. More than one year since Russia launched its war on Ukraine, nearly half (47%) of the surveyed economists claimed they are uncertain about how to assess the overall impact of the war on the Georgian economy. Almost 90% of the economists agree with the decision of National Bank of Georgia (announced on 10 May, 2023) to loosen its monetary policy and decrease the policy rate by 0.5 percentage points from 11% to 10.5%.

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 main findings of the survey of Georgian economists conducted in the fourth quarter of 2022 are: Georgian economists have a positive assessment of Georgia’s present economic situation. Though their predictions for Georgia’s economic situation for the next six months are negative. Almost 90% of surveyed economists think that high inflation currently represents the highest threat to the Georgian economy. 94% of surveyed economists think that among other policy approaches tighter fiscal policy is likely to be the most effective in tackling inflation in Georgia. Similarly, 89% believe in the effectiveness of imposing a tighter monetary policy. The majority of Georgian economists (44%) think that the Estonian model for profit tax should be applied to the financial sector in Georgia from 2023.

According to a survey of Georgian economists, the economic climate in the country in the third quarter of 2022 has improved compared to both: the second quarter of 2022 and the third quarter of 2021. In the third quarter of 2022, the surveyed Georgian economists positively assessed Georgia’s present economic situation. Their assessment of the present economic situation has significantly improved compared to both - the second quarter of 2022, as well as third quarter of 2021 when the assessment of the economic situation of the respective quarter was negative. The surveyed economists’ predictions for Georgia’s economic situation for the next six months were also positive. Though, their expectations have slightly worsened compared to the predictions made for the next six months in the second quarter of 2022, but have significantly improved compared to the third quarter of 2021, when the economists had negative expectations for the next six months of the respective quarter.

According to a survey of Georgian economists, the economic climate in the country in the second quarter of 2022 has improved compared to the first quarter of 2022, as well as compared to the second quarter of 2021. With respect to the covered period, the surveyed Georgian economists positively assessed Georgia’s present economic situation. Meanwhile, in the first quarter of 2022 and in the second quarter of 2021, the assessment of the economic situation for the respective quarters was negative. Thus, in the second quarter of 2022, their assessment of the present economic situation has significantly improved compared to both quarters. The surveyed economists’ predictions for Georgia’s economic situation for the next six months were also positive. In fact, their expectations were much more optimistic compared to the predictions they made for the next six months in both the first quarter of 2022 and the second quarter of 2021.