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marking a monthly record since the beginning of the pandemic.
The flow of visitors was 180% higher y/y, but the figure should be adjusted for the low base, as the country was under lockdown in May 2020.
Despite the relative recovery seen in tourism, its volume amounts to 85% less than was seen in the pre-pandemic period, looking at May 2019.
Also, it is not only that the impressive April GDP expansion (+19% versus April 2019) visibly overstates the state of the country’s economy, the recovery in tourism is still iffy and fragile compared to the pre-crisis basis. It is expected that the central bank will remain cautious at its June 23 monetary board meeting, when deciding whether to turn even more hawkish and push up the key rate from 9.5%.
The consumer price inflation rate in Georgia reached 7.7% y/y in May, at 0.5pp more than was seen in April and May and hitting the highest rate recorded in the past decade.
According to the tourism statistics, more than half of the visitors, some 52,688, entered the country by air in May. Land borders were opened as of June 1, which was broadly seen as highly encouraging, but the share of 70% visitors coming in across land borders might again overstate the impact in terms of tourism revenues.
According to an estimate by Galt & Taggart, Georgia will receive $1.2bn from tourism this year—still a major plunge from the €3.3bn in 2019.
"Opening the land borders from June 1 will facilitate the gradual recovery of tourism. Prior to the pandemic, in 2019, 70% of the total tourism flow was coming by land. We expect that in 2021, Georgia will receive $ 1.2 billion from tourism, which is 36% of 2019 tourism revenue,” the investment bank said.
Last year, Georgia lost tourism revenues of $2.7bn, as revenues from international tourism dropped to $542mn compared to $3.27bn in 2019.
It is also noteworthy that Galt & Taggart has raised its 2021 economic growth forecast for Georgia to 7%.
According to its previous forecast, the country’s economy was set to grow by 5% this year, but after Geostat published its report on 44.8% growth in April, Galt & Taggart raised its growth expectations.
41 GEORGIA Country Report September 2021 www.intellinews.com