Georgian finance minister Lasha Khutsishvili on Thursday said the “total effect” of migration to the country caused by the Russia-Ukraine war was “negative”.
Khutsishvili was speaking at the parliament in his presentation of next year’s state budget, and told lawmakers an analysis of the migration trends showed negative domestic economic outcomes.
Naturally, the effect of migration waves on the economy is positive, especially if relatively high-income people are migrating. However, the analysis shows that the total effect of war-related migration, tourism and exports is negative, not to mention its [negative effect on] inflation and the investment climate", he said.
The minister also noted Russia's invasion of Ukraine was the “most important challenge" both at the global and regional levels, and for Georgia's economy.
"The indirect effects of the war, such as the deterioration of the investment climate in the region, logistical problems and the increase in the prices of energy carriers, are associated with much more significant risks than such direct effects as: exports, migration, cash transfers and so on”, he noted,
“However, there are often cases where the post-pandemic recovery is attributed to migration waves and other war-related events - especially in tourist countries, and if the country is in Russia's neighbourhood", Khutsishvili said.
The minister explained Russia's share both in tourism and exports of Georgia had decreased this year compared to the pre-pandemic 2019.
The statistics show that in the first nine months of 2022, recovery of tourism amounted to 97.5 percent, while it reached 98.1 percent if we exclude Russia and Ukraine. Exports increased by 37.4 percent, and by 47.1 percent excluding Russia and Ukraine", Khutsishvili told MPs.
He also added the “main contributor” to the high economic recovery in Georgia was the general trend of rapid recovery of tourism and exports.