Following rapid double-digit growth in 2021 and 2022, Georgia's economy is continuing on an upward trajectory this year, albeit at a slower pace compared to the previous two years.

In the first half of 2023, there were several positive developments in the Georgian economy, even of these have all come with their own challenges and associated risks. Some key trends include:  Headline inflation decelerated considerably, though core inflation persists.

Certain improvements were recorded in the labor market, but unemployment remains high, and labor market efficiency has still not recovered to prepandemic levels.

Mass migration from Russia, Belarus, and Ukraine has brought increased money transfers, greater consumption, and skills transfer to Georgia. However, it also raises concerns about potential economic imbalances, inflationary pressures, and other social impacts.

The volume of money transfers into Georgia continues to surge, emigration rates are at a record high, implying increased dependence on such transfers, and greater inflationary pressures.

While the tourism sector’s recovery strengthens, there is a reliance on Russian tourists and some concerns about the development of non-traditional tourism.

Georgia's international trade is rising markedly, though this is primarily with its immediate neighbors as trade has stagnated with Europe and declined with China.

Due to an overall increase in demand, businesses in Georgia are relatively optimistic about the future. Pertinently, the share of companies hiring more workers each quarter is increasing. However, Georgian economists are less optimistic, with a negative outlook for the future economic climate.

Georgia's economy has experienced a significant slowdown in growth in the first 6M of 2023, marking the end of its double-digit growth trajectory. However, despite the deceleration, the economy still maintains strong growth numbers – the average growth in the first 6M of 2023 amounted to 7.3%.

The highest growth rate was recorded in January (8.4% YoY), followed by the lowest in February (5.8%).

In Q1 of 2023, a number of sectors reported considerable YoY growth. Information and communication demonstrated the strongest YoY growth compared to the Q1 of 2022 (+44.2%), aligning with the sector boom in Georgia. 

In Q1 of 2023, some of the tourism-related sectors have shown high YoY growth including administrative and support service activities (+32.9%), arts, entertainment and recreation (+17.2%), and accommodation and food service activities (+15.7%), most of which has also shown a strong growth compared to Q1 of 2019. 

Construction sector has also shown strong growth in Q1 of 2023, compared to Q1 of 2022 (+15.1%), in line with increased demand in the sector.