In a recent study, the German Economic Team analyses recent developments in income distribution and poverty reduction in Georgia between 2010 and 2018, looking at trends within Georgia and putting them in an international context. Due to limited data availability, this study does not relate to the most recent distributional policies of the government and the impact of the COVID 19 pandemic.
As a key result, we find a strong decrease in poverty: while almost one third of the population was living in absolute poverty in 2010, this figure had halved to 16% by 2015. However, no further decrease materialized in the final years of our observation period and poverty is high compared to regional peer countries.
Inequality in net incomes has decreased, as shown by a reduction of the Gini coefficient from 45.0 to 40.4. Redistribution reduces market inequality by about one fifth. Notwithstanding the sizeable reduction in income inequality, its value remains high in international comparison.
Georgia’s economy is characterized by the major importance of Tbilisi. The disparity between the capital and the rest of the country is sizeable, with Tbilisi having a GDP per capita about 2.4 times as high as the rest of Georgia. However, this gap has narrowed during the observation period.