5 facts about the growing Georgian economy you should know about
Georgia is a developing country in Europe, with a growing economy. The war between Ukraine and Russia has caused economic changes in many countries. Georgia, in this context, is no exception. Because of the increased immigration rate, which intensified after the beginning of mobilization in Russia, the Georgian economy started to expand. However, that’s one out of 5 facts that you should know about the growing Georgian economy. Keep reading to learn more.
Remittances to Georgia increased by $295 million in October
In October 2022, Georgia received 295 million dollars more in remittances from ex-pat workers than they did in October 2021. In October, a record 502 million dollars were moved, setting a new monthly high.
A total of $3.3 billion was moved between January and October, an increase of $1.4 billion (73%). This compares to the figure for the same period in 2020-21.
Transfers from Russia accounted for the bulk of October’s growth in remittances from abroad; the country’s 8-fold increase in the amount sent in October 2018 to $299 million dwarfed the October 2021 total by a factor of 7. Also, the amount of money sent back home by Kyrgyz citizens to their families in other countries climbed by 10 million dollars, by 6.3 million dollars from the United States, and by 4.6 million dollars from Germany.
Georgia’s economic dependence on Russia has increased significantly
According to a report on Georgia’s economic reliance on Russia published on November 8 by the non-governmental organization “Transparency International-Georgia,” this reliance “increased significantly” in 2022, but not to the point where “Georgia is deeply to find himself in a crisis and not be able to develop,” even under the conditions of the complete termination of economic relations with Russia.
The study found that between January and September of 2022, Georgia received approximately $2.2 billion in income from remittances, tourism, and goods exported from Russia, which is 2.6 times more than the income received from Russia during the same period in 2021 and even more than the income received during the same period in 2019. This, of course, had an impact on the Georgian national currency’s strengthening against major currencies.
A total of 12.6% of Georgia’s GDP in the first nine months of 2022 came from Russian exports, tourism, and remittances, according to the paper. This percentage was at its lowest, 6.3%, in the same time frame in 2021, and its highest, 10.4%, in 2019.
The inflation rate was 10.6% in October
Prices rose 0.5% from the previous month in October 2022, and 10.6% annually, according to numbers released by the National Statistics Service of Georgia on November 3.
The price increases in these categories had the greatest impact on yearly inflation: food and nonalcoholic drinks (15.8%); housing, water, electricity, and gas (13.5%); transportation (11.6%). The main reason behind the increasing inflation rate is the poor monetary policy by Georgia’s National Bank. In addition to that, the country isn’t fully recovered from the consequences of Covid pandemic, which makes the situation even worse.
Georgia’s exports increased by 9% in October
The National Statistics Service of Georgia reports that, so far, imports are up 20% and exports are up 9% (38 million dollars) from October 2021 to October 2022. (187 million dollars). Georgian exports were $449,000,000 in October 2022, while imports totaled $1,123,000,000.
The October trade deficit is -674 million dollars, which is 149 million dollars more than the deficit in October 2021.
There was a rise of 34% in exports and 33% in imports from January to October of 2022. The trade deficit after 10 months is $6,092 million, up from the -$4,567 million seen during the same period the previous year. An additional $1,525,000,000 was added to the shortfall.
In October, prices increased by 0.5%
The National Statistics Service of Georgia reports that the price level of consumer goods and services climbed by 0.5% in October and by 10.6% on an annual basis (during a 12-month period), meaning that prices rose by 10.6% in the previous year.
Vegetables climbed in price by 13.2 percent in October, while the price of milk, cheese, and eggs rose by 2.6 percent, and the price of sugar, jam, and other sweets rose by 2.1 percent. During that time, there was a 4% increase in the cost of clothing and footwear. Fruit costs dropped by 6.7%, while oil costs dropped by 2%.