The global economy remains in a volatile state amid the prolonged effects of the combined negative shocks of the pandemic, Russia’s invasion of Ukraine, high inflation, and the tightening monetary policy. Although the global economy remained resilient at the beginning of the year, the situation is expected to worsen.

In 2022 Georgia stayed on the path of recovery, exceeding experts’ expectations of economic performance. According to GeoStat’s preliminary estimates, the real GDP continues to show double-digit growth rates, measuring at 10.1% y/y in 2022 – which is remarkably close to the NBG’s real GDP growth expectation of 10% from October 2022.

Davit Keshelava from ISET Policy Institute participated in a Thematic Inquiry from the Parliamentary Sector Economy and Economic Policy Committee. The investigation, supported by Konrad-Adenauer-Stiftung (KAS) and the Economic Policy Research Centre (EPRC), was dedicated to understanding the challenges of attracting Foreign Direct Investment (FDI) into Georgia.

ISET Policy Institute developed an advanced quantitative model to simulate the potential impacts of energy and environmental policies on the Georgian economy, the Climate Policy Analysis (ICPA), and investigated the economy-wide implications of three alternative policy options (the introduction of differentiated – by sector – carbon taxes, sectoral emission standards, and uniform carbon tax), complying with the emission targets defined in Georgia’s Climate Strategy and Action Plan, to find out the most effective measures and their welfare effects.

In a recent blog post, Y. Babych and L. Leruth raised several issues related to public infrastructure management in the city of Tbilisi. They observed that the consequences of poor past management practices were highly visible. But some of these consequences are also less visible or less immediate. Take schooling, for example. If the authorities fail to plan for the expected increase in the city’s population over the next few years and neglect to build an adequate number of kindergartens/pre-schools, the results will be overcrowded, fast-decaying pre-schools, and eventually poor educational outcomes. Similarly, as the number of cars keeps growing, the authorities must plan new roads and enhance their maintenance.