BAKU, Azerbaijan, March 17. The economic sanctions imposed on Russia, and the hostilities in Ukraine will have a serious impact on Georgia’s trade turnover with these countries, Mikheil Kukava, the Senior Consultant in Public Financial Management (PFM) at the Policy and Management Consulting Group (PMCG), told Trend.
According to the consultant, Russia and Ukraine are among Georgia’s largest trade partners. Georgia’s exports to Russia, and Ukraine in January 2022 alone totaled around $75 million: $42.7 million to Russia (12.9 percent) and $31.6 million to Ukraine (9.5 percent).
Georgia’s imports from Russia and Ukraine in January 2022 alone amounted to around $119.4 million: $85.9 million (11 percent) from Russia and $33.5 million from Ukraine (4.5 percent), he said.
As Kukava said, Georgia’s exports to Russia and Ukraine include ferroalloys, wine, mineral water, cigars, cigarillos and cigarettes of tobacco or its substitutes, and citrus fruits, both fresh and dried. The export of these commodities will be impacted the most.
Russia’s exports to Georgia, which include mainly wheat, oil, and gaseous hydrocarbons will be affected as well, Kukava added.
Meanwhile, Georgia is already experiencing a decrease in money inflows from these countries. How rapid it is going to be is anyone’s guess but we’d say pretty quick, the PMCG consultant said.
Regarding the measures Georgia could implement to omit even larger risks, Kukava said that the diversification could be of help with tourism and trade turnover, namely, in both exports and imports, but not with remittances.
“The expansion of tourism operations and refocused tourism product, which is unlikely, given the volatility in the rest of the world, might help alleviate the situation. A lot depends on what Georgia has no control, specifically, how effectively these unprecedented sanctions have the Russian economy and a war machine grind to a halt,” the PMCG consultant concluded.
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