IDFI study: how transactions between Georgia and Russia, exports and migration increased
The Freedom of Information Development Institute (IDFI) has published a new report “Russian capital and Russian ties in Georgian business”, which shows that, for example, the share of Russian citizens in transactions for the purchase of houses/apartments in Tbilisi has increased from 0.9 percent to 5 percent, and in Batumi from 5 percent to 17.6 percent.
The paper analyzes the construction sector, large investments, tourism/hospitality and the automotive sector in the context of medium and large companies.
The research methodology is largely based on the analysis of official documents, materials of the state register and media information.
According to the report, from January to November 2022, the share of Russian citizens in housing purchases increased from 0.9 to 5 percent in Tbilisi and from 5 to 17.6 percent in Batumi.
The IDFI study also notes that, according to the National Agency for the State Registry, until September 9, 2022, Russian citizens purchased 15,164 buildings/structures (including 13,262 apartments) and 13,850 land plots in Georgia.
The study says that in 2022 the number of visitors from Russia was 1,087,257, which is 23 percent of the total number of foreign visitors.
According to the National Bank, we learn that the income received from the trips of Russian citizens to Georgia amounted to 891 million dollars, which is 25 percent of the total income received from international visits.
The document notes that in 2022, the share of visits by Russian citizens and income from them in the total amount is ahead of the figures for 2019, when until July 8 there was still direct air traffic between Russia and Georgia and there were no restrictions caused by the pandemic.
As of December 31, 2022, 161,032 Russian citizens (individuals) and 55 legal entities had accounts in Georgian commercial banks.
Also, as of December 2022, deposits placed by Russian citizens in Georgian commercial banks amount to 2.87 billion lari [about $1 billion 150 million], which is 2.16 billion more than before the war (January 2022).
Accordingly, according to the study, as of December 2022, the balance of funds placed on deposits of Russian citizens in Georgian commercial banks increased by about four times compared to the pre-war period.
In January-February 2023, the export of goods from Georgia to Russia increased by 38 percent, and to Armenia by 197 percent.
According to the IDFI study, according to experts, monitoring trade trends shows that a significant part of the increased exports in Central Asia and the Caucasus goes to Russia, and it is in this context that re-exports from Georgia to Russia stand out.