Page 26 - Caucasus Outlook 2024

3.0 Real economy outlook 3.1 Real economy - Georgia
3.1.1 Retail
In Tbilisi, the capital of Georgia, the cost of renting space for shops on the street went up by 11.2% in 2023. This increase brought the rent to around USD19.3 per square metre, which is almost the same as it was in 2019. For 2024, it's expected that these rent prices will continue to rise, but at a slightly slower rate of about 8%.
Looking at the money made in the FMCG market in 2024, it's predicted to be around GEL24.4 billion. The overall FMCG market, including the unorganised market (64%), is expected to exceed GEL22 bn in 2023, exhibiting a smaller growth compared to the organised market (36%).
In 2022, there was a big increase in sales of clothes and shoes because of the recovery from the pandemic and new demand from people moving to the area. This growth is expected to stabilise in 2023 but still grow by a solid 21%.
Electronics and home appliances saw an exceptionally high growth rate in 2022, driven by increased spending from locals and tourists, and extra demand from Turkey. Moving forward, this sector is expected to grow at a slower pace, according to TBC Capital. The presence of organised retailers is significant here, especially since they offer warranties which are a big draw for customers.
In 2024, the retail market is expected to see steady growth, with the rate of increase becoming more moderate compared to previous years. TBC Capital predicts this growth to be in the double-digit range. The prices for goods are likely to stay stable, and there aren't any major unexpected events expected to drastically change demand or supply.
3.1.2 Banks
Georgia's banking sector consists of 15 commercial banks. S&P Global Ratings recent evaluation revealed a rating of 7 points, making Georgia's banking sector stand among the top in the region.
The Georgian National Bank's report says that Georgian banks' assets have exceeded GEL71 billion, as calculated under International Financial Reporting Standards (IFRS). The sector's capital amounts to GEL11.4 billion, constituting 16.0% of total commercial bank assets.
Deposits in Georgian banks reach GEL25.7 billion, with non-residents contributing 28%. Non-resident individual deposits increased to GEL7.3 billion in October, driven by a rise in deposits from Russian emigrants.
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