Georgia’s macroeconomic situation in light of Russian sanctions
On 21 June, Russia announced a ban of direct flights to/from Georgia. The ban will not only have a strong impact on the tourist industry, but will also affect the macroeconomic situation, given the importance of tourism for the Georgian economy.
The estimated impact of Russian sanctions on GDP amounts to 1 percentage point. As a result, we expect a slowdown in real GDP growth from 4.7% in 2018 to 3.6% in 2019. Expectedly, the Georgian Lari has come under pressure: since 21 June, the Lari depreciated by about 4.5% against the US dollar.