Abstract 

On February 2022, began war between Russia and Ukraine. From that period, the main economic trends for the world, as well as in Georgia, was determined by war situation. What kind of impact should war have on economic development both on internationally and on local levels depends on several factors. One of the most important is the duration of war. There also exists several other threats that affect should the world economy, including the economy of Georgia, which is territory small, but from strategic point of view can be considered as one of the most strategic players in the region.

Due to some negative effect that war should have on economics, the economy of Georgia continued to increase, which was expressed in several ways. GDP increased by 10.1% compared to previous years. High economic growth was due to several important factors, in which we should highlight the increased exports of goods by 31.8%, increased foreign direct investment by 61%. A significant contribution was made by highly increased registered enterprises and turnovers of VAT-paying enterprises. Despite these favorable macroeconomic indicators, several main problems raised during that period. One of the main problems during 2022, was high inflation.

Russia and Ukraine are Georgia’s strategic partner. By the beginning of the war several problems raised for Georgia. One of the main threats that should become in long-term period is the high dependence on Russia. As data showed, more the 3 billion US dollar income was received from Russia in 2022 which is 3 times more than the income received from Russia in 2021. In 2022, the income from remittances, tourism and exports of goods from Russia reached nearly 15%, which exceeds two times more than in 2021. In turn the dependence of Ukraine for the same time decreased. In long-term period, this should become a risk to the country in terms of security and resilience. in addition, the drastic rise in prices caused by the considerable increase in demand induced by the massive influx of immigrants from Russia has led to the undermining of a certain segment of Georgia’s middle class, further impeding the country’s economic stability and democratic development. 

The role of Georgia, as one of the critical states of Caucasus, has increased since the beginning of the Russia-Ukraine war.  The sanctions imposed on Russia reduced the energy trade between Europe and Russia to one of the lowest levels in its history. Europeans states began identifying new alternatives for overcoming the energy crisis created by their dependence to Russia. In this context, Caucasus and especially Georgia, despite its high economic dependency of Russia, occupies a key position in this process, as one of the alternative ways for transferring energy resources between these regions. So, Georgia has a perspective for playing a huge role in this process. Georgia is one of the main players in region for energy transferring to Europe in terms of both its parts and its routes in the projects like Baku-Tbilisi-Ceyhan and Southern Gas Corridor including TANAP and TAP. In recent period, the location of Georgia in terms of middle corridor and Belt-Road project gains more importance. Because Georgia plays an important role in removing geographical barrier between central Asia and Europe, acts as an important bridge. This process is a high chance for Georgia for regional integration processes