Economic growth in Georgia is unstable - European Business Association
Economic growth in Georgia is unstable
The current economic growth in Georgia is unstable, and there are still many problems in the country’s economy as a whole that prevent businesses from working, John Brakeveldt, CEO of the European Business Association of Georgia, said.
“Indeed, due to various factors, double-digit growth rates are recorded in the country, but in general, many challenges remain for the Georgian economy. For example, fluctuations in the lari exchange rate, lack of staff and bureaucracy,” according to Brakeveldt.
When the economy is growing very fast — 20% this month and five% 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 as to “have a big economy”, and this must be done by supporting small and medium-sized businesses:
“We want stability, a stable economy, this is important. Georgia does not yet have a European economy. For example, there are many problems in the process of doing business. The fluctuations in exchange rates, the lack of appropriately qualified personnel, the general bureaucracy, and the situation in the judicial system still have a great impact on business. These issues need to be addressed and the government needs to work on it.”
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This year in January-September, the Georgian economy grew by 10.2%. In addition, according to the National Bank, economic growth this year will be 10%. A significant contribution to this will be made by an increase in tourism income 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 has had a positive impact on the Georgian economy, although this is a one-time effect.
Despite the rapid dynamics of economic growth, food prices in Georgia are growing catastrophically. Manufacturers attribute the increase in prices to Russia’s invasion of Ukraine, complex logistics from Russia, and an increase in prices for 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 who emigrated from Georgia increased by 7% from 2010 to 2020 and amounted to 861,000 people, which is 23% of the country’s population.