GEORGIA MONTHLY ECONOMIC UPDATE – MAY 2024
Economic growth was estimated at 8.2 percent in
March and 7.8 percent in Q1 2024 (yoy).
In April, prices increased across the board, except for
food prices.
Georgia’s population fell by 1 percent in 2023, mostly
due to outmigration.
In March 2024, the goods trade balance narrowed
by 25 percent (yoy) due to a strong decline in both
exports and imports.
Deposit and credit growth accelerated in March
compared to February.
The fiscal balance was in surplus in March 2024.
The economy grew by 8.2 percent in March and by 7.8
percent in Q1 2024 (yoy). In March, manufacturing, IT,
professional services, and real estate were the main drivers
of growth. In contrast, construction, energy, and transport-
related activities experienced a decline. Approximately
6,200 new business entities were registered in March, a 14
percent decline (yoy). On the demand side, credit growth
supported growth in consumption. Net exports of goods
positively contributed to growth as well.
In 2023, the population of Georgia experienced a 1
percent decline, dropping to a total of 3.695 million, as
reported by Geostat. This decline was driven by net
negative migration of 39,000 individuals, compounded by a
net natural population decline of 2,500 individuals. Up to
72,000 left the country in net terms (up from 47,000 in
2022). Conversely, net migration of Russian citizens saw an
increase of 17,000 persons (down from 56 thousand in
2022). For all other citizens, net migration remained
positive at around 16,000. In addition, life expectancy saw
a boost in 2023, rising by approximately 1.3 years, to reach
79 years for females and 71 years for males. Meanwhile, the
average median age remained stable at 38 in 2023.
In April, the Consumer Price Index (CPI) remained
below the NBG target of 3 percent despite a large
increase in fuel prices. Inflation increased by 0.3 percent
(mom), bringing annual inflation to 1.5 percent (yoy), up
from 0.5 percent in March. The main driver was an 11
percent increase (yoy) in fuel prices, accounting for an
increase of 1.3 percentage points in headline inflation. In
contrast, food prices (-1.8 percent yoy) and clothing (-4.4
percent yoy) dropped. Real estate prices continued to
increase in March (+7.7 percent yoy), while rental prices
declined by 6 percent (yoy).
The goods trade balance reflected considerable decline
in both exports and imports in March. Exports declined
by 4.4 percent (yoy) while imports fell by 17 percent (yoy).
As a result, the trade deficit narrowed by 25 percent (yoy)
in March. The decline in exports was primarily driven by
decreases in the export of copper ore and nitrogen fertilizer,
while ferroalloys tripled (yoy). Exports of wine (+63
percent yoy), alcohol (+39 percent), and mineral water
(+37 percent yoy) also rose considerably. Imports of used
1 significant decline in the number of arrivals from that country
These numbers exclude arrivals from Azerbaijan as the land border
has remained closed since the COVID-19 pandemic, resulting in a
cars dropped by 51 percent (yoy) in March while remaining
the largest import item. Imports from the EU shrunk by 3.5
percent in March 2024. Imports also declined across key
trading partners such as Turkey, Russia, China, and the US.
According to preliminary data, the trade deficit widened by
28 percent in April, with exports shrinking by 12 percent
and imports growing by 11 percent.
Georgia’s external accounts continued to weaken due to
lower money transfers, primarily from Russia. Money
transfer gross inflows reached US$278 million in March, a
37 percent drop (yoy). Inflows from Russia experienced a
76 percent decline (yoy), with its share in total inflows
declining to 19 percent, down from 51 percent a year
earlier. The tourism sector showed signs of recovery in Q1
2024 as the number of foreign arrivals reached 106 percent
of the levels recorded in Q1 2019 (excluding arrivals from
Azerbaijan)1 and increased by 8 percent compared to Q1
2023. Meanwhile, proceeds from tourism increased by only
1.5 percent (yoy), to US$0.8 billion in Q1 2024. Official
reserves stabilized at US$4.8 billion (equivalent to 4 months
of imports). Developments in external trade and other
external flows kept Lari exchange rate against the US dollar
stable in April as compared to March (while 6 percent
weaker in yoy terms). Political uncertainty led to an
exchange rate depreciation of around 3 percent since May
15 and the NBG intervened by selling $60 million in the
foreign exchange market.
Annual bank deposit growth remained high. In March,
the total stock of deposits increased by 15 percent (yoy,
excluding the effect of the exchange rate), faster than in
February and driven by both local and foreign exchange
deposits, which increased by 31 and 6 percent, respectively
(yoy). Nominal credit growth continued at a pace of 18
percent (yoy) in March. GEL loans increased by 19 percent
(yoy) in nominal terms, while foreign exchange loans rose
by 16 percent (yoy).
In March 2024, Georgia recorded a surplus of about 0.5
percent of projected GDP. General government tax
revenues increased by 49 percent (yoy) in nominal terms,
contributing to overall revenue growth of 44 percent.
However, this increase was primarily attributed to a
reduction in VAT refunds compared to the previous year.
Conversely, most other taxes experienced significant
declines: VAT (-4.1 percent), driven by weaker imports,
domestic excise (-4.8 percent), profit tax (-31.0 percent),
and customs duties (-22.1 percent), with only import
excises and income tax registering (yoy) growth.
Government current expenditures saw a 7 percent (yoy)
increase, while capital expenses rose by 16 percent (yoy).
Despite the contained deficit and the limited depreciation of
the lari, public debt increased to 35.9 percent of projected
GDP by end-March 2024, up from 34.6 percent a year
earlier. As a result, government deposits increased by
around 0.8 percent of GDP in March.
compared to pre-pandemic levels.
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 GEORGIA MONTHLY ECONOMIC UPDATE – MAY 2024

Figure 1. Economic growth remained solid in March Figure 2. Inflation picked up slightly in April
(yoy, %) (yoy, %)
14.8 14.5 16
14
12
11.0 10
10.5
9.5 8
8.2 8.1 8.2 7.8 6
7.5 4
7.0 6.9
2
5.8
4.7 0
-2

Jun-22

Nov-22
Dec-22

Jun-23

Nov-23
Dec-23

Apr-24
Jul-22

Oct-22

Jul-23

Oct-23
Feb-22
Apr-22

Sep-22

Feb-23
Apr-23

Sep-23

Feb-24
May-22

Aug-22

May-23

Aug-23
Jan-22
Mar-22

Jan-23
Mar-23

Jan-24
Mar-24
Annual Inflation eop (percent)
Feb
Q1
Q2
Q3
Q4
2022
Q1
Q2
Q3
Q4
2023

Q1
Mar
Jan

Annual Inflation pa (percent)

Source: Geostat
2022 2023 2024 Source: Geostat

Figure 3. Trade flows saw a significant decline in Figure 4. Money transfers from abroad continued to
March slow (yoy)
(US$ million) (US$ million)
70
600
60 550
50 500
40 450
400
30 350
20 300
10 250
200
0 150
-10 100
Export Growth (percent) 50
-20
Import Growth (percent) 0
-30

Nov-23
Nov-22
Jun-22

Dec-22

Jun-23

Dec-23
Jul-22

Oct-22

Jul-23

Oct-23
Feb-22
Apr-22

Sep-22

Feb-23
Apr-23

Sep-23

Feb-24
May-22

Aug-22

May-23

Aug-23
Jan-22
Mar-22

Jan-23
Mar-23

Jan-24
Mar-24
Nov-22

Jul-23

Nov-23
Jul-22

Sep-22

Sep-23
Mar-22

May-22

May-23
Jan-22

Jan-23

Mar-23

Jan-24

Mar-24

Source: Geostat Source: NBG

Figure 5. The GEL depreciated in April (yoy) Figure 6. The fiscal accounts showed a surplus in the
first quarter
(GEL to USD) (GEL million)
3.5 8000 300
3.4 267
6000 250
3.3
3.2 4000 200
3.1
3 2000 150

2.9
0 100
2.8 7…
2.7 -2000 50
2.6
-4000 0
2.5
2.4 -6000 -31 -50
Jun-22

Nov-22
Dec-22

Jun-23

Nov-23
Dec-23
Jul-22

Oct-22

Jul-23

Oct-23
Feb-22
Apr-22

Sep-22

Feb-23
Apr-23

Sep-23

Feb-24
Apr-24
Mar-22
May-22

Aug-22

Mar-23
May-23

Aug-23

Mar-24
Jan-22

Jan-23

Jan-24

2022 Jan-Mar 2023 Jan-Mar 2024 Jan-Mar

Revenue Current spending Capex Deficit

Source: NBG Source: Ministry of Finance

For additional information: Mariam Dolidze, Sr. Economist, mdolidze@worldbank.org 2 | Page