Gocha Tutberidze
Doctor of Economics, Professor, Central University of Europe
Gocha Ugulava
Doctor of Economics, Associate Professor, Central University of Europe
Abstract
Over the past decade, Georgia’s economy has exhibited high growth rates, driven by both post-pandemic recovery processes and the combined effects of external and domestic factors. Real GDP has nearly doubled, exports and average wages have increased, and unemployment has declined. However, these achievements reflect only superficial success and conceal deep-rooted structural problems that threaten the sustainability of the country’s economic model. The analysis confirms that economic growth has not been accompanied by sufficient job creation or efficient utilization of labor resources: self-employment and informal employment remain high, while “hidden unemployment” is not fully captured in official statistics. Regional disparities and the unequal distribution of social benefits heighten the risks of social polarization. Migration dynamics indicate a substantial outflow of the working-age population, whereas the rise in immigration generates new socio-economic challenges. The structure of foreign trade remains dependent on re-exports and low value-added products, while limited innovative potential and a low level of research and development (R&D) significantly constrain the country’s competitiveness. The decline in foreign investment and the consumption-driven nature of economic growth further reinforce structural weaknesses. Overall, Georgia’s current economic development trends call for a comprehensive policy revision aimed at strengthening labor market institutions, fostering innovation-driven sectors, and promoting strategies focused on regional balance.
Keywords: Georgian economy; structural imbalance; labor market; migration; social inequality; foreign investment; innovative development.
JEL Codes: O11; J21; F21
DOI: 10.52244/c2025.1
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