Issue 114: Change in the Borrowing Patterns of Private Sector in Georgia
In the past few years several major regulations were implemented both by the government and the National Bank of Georgia. In this newsletter, possible implications of imposed lending constraints on the private sector are presented.
On October 10, Aleksi Aleksishvili, Chairman and CEO at PMCG, participated in a panel discussion entitled “Accountability Through Digital Government” held in the course of the Civil Society 20 (C20) summit, which serves as an official Engagement Group of the G20.
In the course of our collaboration with the Kyrgyz Republic, we facilitated the diagnosis of its legal and institutional framework and practices with a view to medium-term expenditure planning at its Ministry of Finance (MoF) as well as in sectoral ministries. In addition, we made initial steps towards fostering reinforcement of the interrelationship between mid-term planning and annual budgeting by strengthening the respective policy and legal framework.
We have started a new project designed to provide an independent evaluation of the European Neighbourhood Programme for Agriculture and Rural Development’s (ENPARD) work in Moldova. This project is funded by the EU and is being implemented by PMCG as part of a consortium led by ADE.
Pinpointing the key structural reform priorities to support economic transitions in the countries of the South Caucasus and Central Asia (CCA countries), was one of the main topics discussed on September 18 at the International Monetary Fund’s (IMF) brainstorming session.
We are continuing to actively work on the implementation of excise stamps reform with the Government of Liberia’s institutions, particularly the Ministry of Finance and Development Planning (MFDP) and the Liberia Revenue Authority (LRA), to strive towards a policy environment that is predictable, transparent, fair and conducive thereby enhancing domestic revenue mobilization.
In the very first edition of PMC Research Center Ukraine’s Economic Outlook and Indicators, we present an overview and analysis of the dynamics of Ukraine’s main economic indicators over the last decade, such as GDP, inflation, exchange rates, foreign trade, FDI, and remittances.
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.
The study examines the rural tourism value chain in the Tianeti municipality and Lower Pshavi area (Dusheti municipality) of Mtskheta-Mtianeti region in order to introduce more economic opportunities in these deprived rural areas of Georgia. This study was conducted by PMC Research in collaboration with Biological Farming Association ELKANA, as part of an Austrian Development Cooperation project.
The study examines organic agricultural products in the Tianeti municipality and Lower Pshavi area (Dusheti municipality) of Mtskheta-Mtianeti region in order to introduce more economic opportunities in these deprived rural areas of Georgia. This study was conducted by PMC Research in collaboration with Biological Farming Association ELKANA, as part of an Austrian Development Cooperation project.
The spread of novel coronavirus COVID-19 has resulted in global pandemics, which was followed by an abrupt economic crisis, as economies stood still in order to overcome the threat to people’s lives. In this bulletin, we overview the readiness to the healthcare and economic crisis, the evolution of the pandemic and characteristics of the lockdown for the six countries in the Black Sea Region.
The paper reviews developmental implications of labour migration from Central Asia, analyses policy gaps in development-oriented migration management and offers recommendations to facilitate impactful engagement of local authorities in migration governance.
This paper is written by Dr. Giorgi Khishtovani, Director at PMC Research, with contribution from Maya Komakhidze, researcher at PMC Research.
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.
The number of international travelers declined by 96.4% in August compared to the same period of 2019, while the number of international visitors fell by 96% and the number of international tourists fell by 95.4%;
In the first 8 months of 2020, revenues from travel amounted to $483 mln, which is 78% lower than the same period in 2019;
In Q2 2020, compared to Q2 2019, turnover of accommodations declined by 66%, and turnover of food facilities declined by 37%;
In August 2020, compared to August 2019, yearly Hotel Price Index decreased by 32.1% in Guria and 21.7% in Adjara;
In August 2020, compared to August 2019, the average price of guesthouses in Guria decreased by 58%, while the average price of 3-star hotels decreased by 35%;
In August 2020, compared to August 2019, the average price of 4-star hotels decreased by 38%, while the average price of 5-star hotels decreased by 25%. The average prices of guesthouses and 3-star hotels registered a more modest decline.
In Georgia, the average cost of a room in a 3-star hotel was 128 GEL per night in August 2020. While the average cost of a room in a 4-star hotel in Georgia was 229 GEL per night and the average cost of a room in a guesthouse was 74 GEL per night. The average cost of a room in a 5-star hotel in Georgia in August 2020 was 367 GEL per night. In Guria, the average price was 776 GEL, followed by Tbilisi - 426 GEL, Kakheti - 360 GEL and Adjara – 346 GEL.
The aim of this document is to identify the key economic policy/regulatory challenges in Georgia’s tourism value chain and to facilitate dialogue between private and public sectors including a wide spectrum of civil society and political representatives.