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 unprovoked Russian invasion of Ukraine has brought economic and political turmoil to the world, taking numerous civilian lives as well. Since the war broke out, more than 8 million Ukrainians have been recorded as having emigrated across Europe, making it crucial to understand their impacts on the economy and in particular the labor market of host countries and Ukraine. Therefore, this bulletin overviews the dynamics of displacement from Ukraine and analyzes their current and potential economic and social impacts on Ukraine and host countries.

Macro Overview 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.

In 2022, the number of international visitors reached a total of 3.9 million, which is 176% higher compared to 2021 and amounts to 65% of the pre-pandemic (2019) total. In 2022, the highest number of visitors to Georgia came from Russia, amounting to 915,000. Russia was followed by neighboring countries: Turkey (711 thousand) and Armenia (531 thousand). In 2022, the income from international travel reached USD 3.5 billion, which is 8% higher compared to 2019. The recovery was gradual but by Q4 of 2022, it had exceeded the corresponding figure for Q4 of 2019 by 46%. In terms of nationality, the income from Russian travelers was the highest in 2022 and amounted to USD 891 million (25.3% of total income), which is 15% higher compared to 2019. Meanwhile, income from Ukrainian travelers exceeded the pre-pandemic number by 52% and reached USD 282 million.

In Georgia, the average cost of a room  in a 3-star hotel was 159 GEL per night in January 2023, while the average cost of a room in a 4-star hotel in Georgia was 245 GEL per night and the average cost of a room in a guesthouse was 129 GEL per night. The average cost of a room in a 5-star hotel in Georgia in January 2023 was 400 GEL per night. In Kakheti, the average price was 545 GEL, followed by Tbilisi – 462, Samtskhe-Javakheti – 447, and Guria – 340.

In January 2023, the number of persons receiving a monthly salary increased by 2.5% compared to the corresponding period of 2022 and by 10.7% compared to the corresponding period of 2021. From August 2022 to January 2023, the total number of vacancies published on jobs.ge amounted to 40,531, which was 24.3% higher compared to the corresponding period of 2021-2022. In January 2023, compared to December 2022, the total number of vacancies published on jobs.ge increased by 19%. From August 2022 to January 2023, a total of 7,077 vacancies were published in the field of finance, statistics, which was 142.9% higher than the corresponding period of 2021-2022 and 297.2% higher compared to the corresponding period of 2020-2021.

In 2022, the tourism sector showed a significant recovery, which could be attributed to a combination of factors, such as the rapid inflow of international visitors after the outbreak of the Russia-Ukraine war, the alleviation of COVID-19-related restrictions, the reopening of land borders, the revival of flight routes, and sustained high demand among domestic visitors. The accommodation sector recovered significantly in Q3 of 2022, with turnover showing a 20.1% increase compared to Q3 of 2019. Notably, the turnover of the accommodation sector reached a high of GEL 794.9 mln in Q3 of 2022. In the first three quarters of 2022, the average monthly salary in the accommodation sector exceeded pre-pandemic values significantly with an average YoY increase of 22.5%. This could be attributed to a labor shortage in the tourism sector, inflationary trends, and increased demand for accommodation and food services.

In Georgia, the average cost of a room in a 3-star hotel was 167 GEL per night in December 2022, while the average cost of a room in a 4-star hotel in Georgia was 275 GEL per night and the average cost of a room in a guesthouse was 122 GEL per night. The average cost of a room in a 5-star hotel in Georgia in December 2022 was 456 GEL per night. In Tbilisi, the average price was 559 GEL, followed by Kakheti – 552, Samtskhe-Javakheti – 458, and Adjara – 429.

In December 2022, the number of persons receiving a monthly salary increased by 2.9% compared to the corresponding period of 2021 and by 6.4% compared to the corresponding period of 2020. In 2022, from July to December, the total number of vacancies published on jobs.ge amounted to 41,237, which was 26% higher compared to the corresponding period of 2021 and 159.4% higher compared to the corresponding period of 2020. In December 2022, compared to November 2022, the total number of vacancies published on jobs.ge decreased by 19%. In 2022, from July to December, a total of 11,928 vacancies were published in the field of sales/procurement, which was 41% higher than the corresponding period of 2021 and 197% higher compared to the corresponding period of 2020.

The unprovoked Russian invasion of Ukraine has shattered the lives of millions of civilians and destroyed dozens of Ukrainian cities. The damage has been enormous, with only some of it economically measurable. While we cannot assess the true cost of thousands of lives being taken, we can approximately measure the damage done to Ukraine’s infrastructure, social, and other sectors, which is discussed in this bulletin alongside the revised 2023 budget for Ukraine.