ISET

On November 27, ISET hosted Francois Painchaud, the Resident Representative of the International Monetary Fund (IMF) in Georgia. Mr. Painchaud presented the 2017 October Regional Economic Outlook for the Caucasus and Central Asia (CCA) region, covering the global and regional environment, outlook and policy actions, and policies to help maintain macroeconomic stability and how to secure higher and more inclusive growth.

At the beginning of the presentation, Mr. Painchaud overviewed the main trends in the global and regional environment. Strengthening economic conditions in the region’s main trading partners and stabilizing the commodity prices, combined with continued implementation of structural reforms are anticipated to support the recovery. Growth in the CCA region started to pick up during the second half of 2016, and is expected to accelerate, but medium-term growth is forecast to remain below historical norms.

In Q3 2017, the volume of remittances in Georgia grew by one fifth compared to last year’s level (+19.7%), reaching 367 million USD. The recovery of remittances is a clear sign that the economy of the region continues to improve. All primary source countries of money inflows to Georgia showed a positive annual change: Russia (+13.3% YoY), the United States (+9.1% YoY), Italy (+23.8% YoY), Greece (+9.5% YoY), and Israel (+102.2% YoY).

The growth of money inflows from Russia reflected the dynamics of oil prices on the world market, which positively affected economic growth and therefore the ruble exchange rate against the US dollar. Remittances from Israel have continued to show unprecedented growth, which stems from the wave of Georgian emigration that started in 2014, when the countries ratified a visa-free regime. Following this, many Georgians stayed in Israel illegally or sought asylum there after finding it to be an outstanding country in which to work and send money back to their homeland. Taken together, these two countries contributed 11.2 percentage points to the total YoY growth of remittance transfers in Q3 2017.

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