In the first half of 2021, external trade turnover in Georgia amounted to 6.2 bln USD, which is 20.7% more than corresponding period of 2020 and 0.5% more than the prepandemic period of January-June 2019.
Georgian exports amounted to 1.9 bln in January-June 2021, which is 25.2% more than in January-June of 2020 and 5.3% more than in January-June of 2019. Moreover, Georgian imports recorded 4.3 bln USD, which is 18.9% more than in the first half of 2020 and 1.5% less than in the corresponding period of 2019.
In the first half of 2021 Georgian trade deficit increased by 0.3 bln USD (14.5%), compared to the first half of 2020, and decreased by 0.16 bln USD (6.1%), compared to the corresponding period of 2019 and amounted to 2.44 bln USD.
In the period of January-June 2021, compared to January-June of 2020, trade turnover increased with the EU (9.9%), Russia (24.8%) and China (22.7%). However, compared to the corresponding period of 2019, trade turnover increased with Russia (12.3%) and China (27.9%), but decreased with the EU (-14%).
Georgia’s main total trade partners in the first half of 2021 were Turkey (15.2%), Russia (11.8%) and China (10.5%). Main export partners were China (15.4%), Russia (14%) and Azerbaijan (8.4%). Moreover, main import partners were Turkey (18%), Russia (10.8%) and China (8.4%).
In 2021, unemployment remains an unresolved obstacle for the Georgian economy and society’s most pressing problem. Over the years, diverse public opinion polls have indicated that unemployment is the most important issue at national level. For instance, in 2020, according to a public attitudes poll conducted by the National Democratic Institute, for 46% of respondents, the main challenge they were facing was unemployment.This issue focuses on changes in unemployment trends in Georgia in the period of 2017-2020 and provides an analysis of the effects of the COVID-19 crisis on unemployment in the country.
This bulletin focuses on remittance inflows into Georgia in 2020 and its development in 2021.
The social and economic stability of Georgia strongly relies on the money sent from emigrants to their families. Based on World Bank Data, in 2019, in terms of dependence on remittance inflows, Georgia ranked 21st in the world, with remittance inflows to GDP ratio. Moreover, the study conducted by the State Commission on Migration Issues revealed that in 2016 money sent by every second emigrant to their families accumulated half or 3/4 of family budget, and for the 15% of families remittance was the only source of income in Georgia.
The COVID-19 pandemic and imposed restrictions hindered economic activity in nearly every country, resulting in a negative effect on wages and employment for migrant workers and consequently, drying up of remittance inflows. In 2020 due to the emerged crises and uncertain situation, the World Bank projected shrinking remittance flows for low and middle-income countries by 7.2%3, while the IMF forecasted a 15%4 decline for Georgia. However, despite the crisis and pessimistic predictions in Georgia, the volume of remittance inflows in 2020 compared to 2019 has increased by 8.8% and reached the highest figure in the past decade - 1.9 BLN USD, amounting to 11.9%, expressed as a percentage to GDP.
In 2020, the COVID-19 pandemic heavily disrupted the world, causing both a global health emergency and a global economic crisis. While almost every country and every sector have been affected, economies reliant on the service sector, and especially the tourism industry, such as Georgia, have suffered notably. Indeed, measures taken to contain the spread of the virus have had an especially negative impact on the economy. Preliminary estimates suggest a decline in Georgia’s real GDP in 2020 of 6.1%, the sharpest drop since 1994.In this issue, we provide forecasts for the performance of the Georgian economy for 2021, namely regarding its real GDP growth rate, sector-specific growth rates, and employment.
International rankings and indicators help us to understand and assess how countries are performing in different areas. In this bulletin, Georgia’s positions in international rankings and their dynamics are reviewed based on recent data, and these are also compared to other Eastern Partnership (EaP) countries (Armenia, Azerbaijan, Moldova, Ukraine, and Belarus).
The COVID-19 pandemic, and the ensuing economic shock, has prompted governments all around the globe to act swiftly and decisively to mitigate the health and economic impacts of the crisis. Each country has responded in its own way, and it is useful to look at these different responses to identify good practices. In this issue, we look broadly at countries in Eastern Europe and Central Asia, and present three case studies of Georgia, Moldova, and Serbia respectively, including an analysis of the fiscal measures these countries have taken and an overview of the impacts of the pandemic.
In August 2020, the number of employees receiving salaries recovered almost fully and stood at only 1% less than the corresponding month of last year;
During the period of January-August 2020, the month of May saw the largest drop in the number of employees receiving salaries (a dip of 9% or 74 951), compared to the corresponding period of 2019;
The month of April experienced the biggest decline in the number of employees for four out of the five higher-income categories, with the highest decline (23%) recorded in the number of people earning more than GEL 4800 per month;
The total average monthly earnings of employees in Q2 of 2020 amounted to GEL 1150.1, which represents a 3% decrease compared to Q2 of 2019;
According to the data obtained from HR.ge and Jobs.ge, the drop in demand for labor started in March and reached its peak in April, when HR.ge and Jobs.ge experienced an 87% and 78% year over year (YoY) decline in new vacancies posted, respectively. The YoY growth rates started recovering towards the baseline in May, but then registered a significant decline in August.
By the end of the second quarter of 2020, loans and deposits, expressed as a percentage of GDP, increased by 3.6 and 4.9 percentage points, respectively, compared to the beginning of the year;
By the end of the second quarter of 2020, bank assets, expressed as a percentage of GDP, increased to 98.4%;
By the end of July of 2020, the volume of loans was increased by 19%, compared to July of 2019;
The average interest rates on loans in January-July of 2020 denominated in national currencies were 0.9 percentage points higher than in January-July of 2019, while the average interest rates on loans denominated in foreign currencies were 0.8 percentage points less;
By the end of July of 2020, the volume of deposits in Georgia was increased by 21%, compared to July of 2019;
The average interest rates on deposits in January-July of 2020 denominated in national currencies were 1.2 percentage points higher than in January-July of 2019, while the average interest rates on deposits denominated in foreign currencies were 0.4 percentage points less;
In January-July of 2020 trade had the highest share of total loans with 29.5%;
In January-July of 2020, share of construction in total loans increased by 3.6 percentage points, while share of financial intermediation decreased by 8.2 percentage points, compared to the corresponding period of 2019;
According to the World Bank, Georgia’s ratio of non-performing loans to total loans decreased in 2019, compared to 2018, by 0.8 percentage points and dropped to 1.9%;
By the end of July of 2020 the rates of dollarization on loans and deposits were increased by 0.3 and 8 percentage points, compared to the corresponding period of 2019. The rates rose to 56.9% and 61.3%, respectively.
In the first half of 2020, external trade turnover in Georgia amounted to 5.054 bln USD, which is 18% less than corresponding period of 2019;
Georgian exports amounted to 1.5 bln in January-June 2020, which is 16% less than in January-June of 2019. Moreover, Georgian imports deteriorated even more by reaching 3.5 bln USD, which is 19% less than in the first half of 2019;
In the first half of 2020, Georgian trade deficit decreased by 0.55 bln USD (21%), compared to the first half of 2019;
There are more EU member states amongst Georgia’s top 10 export partners in the first half of 2020, compared to the first half of 2019;
In the period of January-June 2020, total trade turnover with the EU and Russia decreased by 22% and 16% respectively, but increased with China by 10% compared to the corresponding period of last year;
Georgia’s main trading partners in the first half of 2020 were Turkey, Russia and China. Their shares in Georgia’s total trade turnover were 14%, 12% and 10% respectively;
77.4% of Georgian exports are concentrated amongst the top ten partners. Moreover, top ten import partners occupy 69.4% of total imports.
Due to the COVID-19 pandemic, global remittance flows are expected to fall by 20% in 2020 (World Bank), while the decrease in Georgia is forecast at 15% (IMF);
In the first half of 2020, remittances have declined by just 4.8% compared to the same period of 2019;
Remittance inflows have been growing by an average of 8.5% over the past decade;
The contribution of remittance inflows in GDP has increased significantly over time and amounted 11% on average for the period of 2015-2019;
In 2020, remittance inflows saw a sharp drop (-42.3%) in April, however, the recovery in June was also strong (17.8%), compared to the same period of 2019;
Remittances from Russia declined the most in the first half of 2020 compared to the first half of 2019 (-27%), while Italy recorded the strongest growth (14%).