Unemployment has remained one of the prioritised issues in Georgian economy since its independence. Moreover, Georgian economy was characterised with high unemployment rates even during periods of economic upturn prior to 2008 global financial crisis. COVID-19 is likely to impact job market and income of people employed, therefore, it is important to consider their pre-pandemic state. This bulletin overviews the unemployment and income figures of 2016-2019. The period of 2016-2019 is characterised with significant trends and issues such as: • Growth in average monthly incomes;• Slight decrease in unemployment rate;• Increased share of hired individuals in labor force;• Slight decrease of share of self-employed individuals in labor force.
PMC Research forecasts that budget deficit as a % of GDP will increase from 3.1% to 9.8% in the optimistic scenario, while in the less pessimistic and very pessimistic scenarios it will amount to 11.2% and 14.1%, respectively.
Planned budget spending should be reprioritized to provide space for COVID-19-related expenditure;
Fiscal measures should be targeted to assist the hardest-hit households and firms. The government should ignore lobbying pressure from different sectors and businesses seeking benefit from fiscal policy package;
Effective public financial management is key to safeguarding against fiscal risks and enhancing the Government’s capacity to respond to the crisis.
If the optimistic scenario proves true, Georgia’s real economy is expected to shrink by 4.3%. The Georgian economy is expected to decrease by 8% in case of less pessimistic scenario, while in the event of the very pessimistic scenario, the expected fall is 12.9%.
In the optimistic scenario, Georgia’s real GDP growth is expected to drop by 0.43% every week, while the weekly loss is more pronounced for the less pessimistic (-0.47%) and very pessimistic (-0.5%) scenarios respectively.
The experiences of some European countries should be taken into account in the process of phased lifting of the restrictive measures.
Interview with Aleksi Aleksishvili, Chairman and CEO at PMCG about the most important components, necessary to successfully introduce reforms for World Review magazine, published by Diplomat and the New York Times.
In the second quarter of 2020, Georgian economic climate has significantly worsened. In this period, Georgian economists assessed Georgia’s present economic situation negatively; Moreover, the assessment of present economic situation in this quarter has worsened drastically compared to the first quarter of 2020 and the second quarter of 2019.
In the second quarter of 2020, Georgia’s economic situation in the next six months has also been assessed negatively by Georgian economists. Furthermore, expectations in the next six months have deteriorated rapidly compared with both, first quarter of 2020 and second quarter of 2019.
The average cost of a room in a 5-star hotel in Georgia in March 2020 was 274 GEL per night. In Mtskheta-Mtianeti, the average price was 779 GEL (only one 5-star hotel), followed by Tbilisi - 396 GEL, Samtskhe-Javakheti – 339 GEL and Guria - 331 GEL.
Number of international travelers in Georgia decreased by 385 846 (-62.3%), compared to the same period previous year, while number of visitors decreased by 297 119 (-79%) and the number of tourists decreased by 184 320 (-56.1%).
Net revenues from exporting tourism services in 2019 amounted 3267.7 mln USD, which accounts for 18.4% of Georgian GDP.
In March 2020, compared to February 2020, hotel price index increased by 5.1%, which can be explained by a market failure.
In March 2020, compared to the same period of 2019, hotel price index decreased by 12.9%. The average price of 5-star hotels decreased by 43% Year over Year (YoY), while price for 4-star hotel fell by 18.1%, and for 3-star hotels and guesthouses by 5.8% and 3.3% respectively.
In Georgia, the average cost of a room in a 3-star hotel was 115 GEL per night in February 2020. While the average cost of a room in a 4-star hotel in Georgia was 184 GEL per night and the average cost of a room in a guesthouse was 66 GEL per night.The average cost of a room in a 5-star hotel in Georgia in February 2020 was 301 GEL per night. In Mtkheta-Mtianeti, the average price was 779 GEL, followed by Tbilisi - 444 GEL, Samtskhe-Javakheti – 339 GEL and Guria - 331 GEL.
In February 2020 compared to February 2019, International visitor trips decreased by 0.6%. Among them, the number of tourists increased by 4%. On January 29th, Georgia suspended direct flights from China due to COVID-19, as a result, in February 2020, number of visitors from China decreased by 59.5% compared to February 2019. In February 2020, compared to January 2020, hotel price index decreased by 23.2%. In February 2020, compared to the same period of 2019, hotel price index decreased by 14.6%. In terms of regions, the prices decreased the most in Adjara (-28.8%), followed by Guria (-25.5%), Samtskhe-Javakheti (-16.9%) and Tbilisi (-11.6%).
In Georgia, the average cost of a room in a 3-star hotel was 136 GEL per night in January 2020. While the average cost of a room in a 4-star hotel in Georgia was 219 GEL per night and the average cost of a room in a guesthouse was 75 GEL per night.The average cost of a room in a 5-star hotel in Georgia in January 2020 was 432 GEL per night. In Tbilisi, the average price was 540 GEL, followed by Adjara - 389 GEL, Kakheti – 384 GEL and Samstkhe-Javakheti - 370 GEL.
In January 2020, in Georgia the hotel price index increased by 4% compared to December 2019. The 3-star, 4-star and 5-star hotel price index decreased by 1.9%, while for guesthouses, the price index increased by 10.8%. In January 2020, compared to January 2019, hotel prices in Georgia increased by 8.6%. The prices of 3*, 4*, 5* hotels increased by 4.6%, while the prices of guesthouses increased by 16.3%.