Recent developments in the Middle East and the escalating geopolitical situation are expected to impact Georgia’s economy through several channels, economist Giorgi Khishtovani told BM.GE.
“First, we will see rising prices. Price increases could affect multiple sectors. In Georgia’s case, higher oil and fuel prices will ripple across the economy, potentially reducing demand and slowing economic activity. Supply chains may also be disrupted, making trade more difficult and costly. In a crisis scenario, even the growth of Georgian exports could slow or decline entirely,” Khishtovani explained.
Tourism is another major factor. “Countries like Israel have historically played a significant role in bringing visitors to Georgia. With the conflict there, travel behavior will change. Tourism, which already influences agriculture and hospitality, could negatively affect employment and the broader economy.”
However, Khishtovani noted a potential positive impact if capital inflows from countries like Iran increase. “The influx of Russian migrants has shown that in times of regional conflict, many people may move to Georgia, invest in real estate, and stimulate the construction sector. While Iran is geographically further and sanctioned, attracting 100,000 Iranian investors could benefit the economy, though it carries security risks.”
