Economic growth in Georgia is unstable
Current economic growth in Georgia is unstable and there are still many issues in the country’s economy as a whole that are preventing businesses from operating, said John Brakeveldt, CEO of the European Business Association of Georgia.
“In fact, due to various factors, double-digit growth rates are being recorded in the country, but in general, many challenges remain for the Georgian economy. For example, fluctuations in the lari exchange rate, staff shortages and bureaucracy,” says Brakeveldt.
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If the economy is growing very quickly — 20% this month and 5% next month — that’s something to think about, he said. This means that the economy is underdeveloped. The country must function in such a way that it “has a big economy” and this must be done by supporting small and medium-sized enterprises:
“We want stability, a stable economy, that’s important. Georgia does not yet have a European economy. For example, there are many problems in the business process. The exchange rate fluctuations, the lack of appropriately qualified personnel, the general bureaucracy and the situation in the judiciary still have a strong impact on business. These issues need to be addressed and the government needs to work on them.”
This year from January to September the Georgian economy grew by 10.2%. In addition, according to the National Bank, economic growth will be 10% this year. A significant contribution to this will be an increase in tourism revenues due to the mass migration of Russians to Georgia in connection with Russia’s military actions in Ukraine.
It should be noted that according to one of the senior representatives of the Asian Development Bank (ADB), Liaziza Sabirova, the influx of migrants had a positive impact on the Georgian economy, although this is a one-off effect.
Despite the rapid dynamics of economic growth, food prices in Georgia are increasing catastrophically. Manufacturers attribute the price increase to the Russian invasion of Ukraine, complex logistics from Russia and an increase in the prices of products and raw materials on the world market.
It should also be noted that according to the research organization PMCG, the total number of people emigrating from Georgia increased by 7% from 2010 to 2020 and amounted to 861,000 people, which is 23% of the country’s population.