The labor shortage is a major business challenge

The sides highlighted the Middle Corridor, a logistics route connecting Central Asia and China to Europe via the South Caucasus through Georgia, and its growing dynamic of freight traffic”, and agreed to direct joint effort towards attracting additional cargo to the route by further developing existing transport and logistics infrastructure.The Ministers underscored the importance of the Green Energy Corridor project for energy independence of both Georgia and Europe and the Black Sea submarine cable project, an international initiative to connect the South Caucasus power grid to that of Europe. They emphasised the role of the Corridor in “further deepening the regional cooperation and delivering the green energy resources of the South Caucasus to the European Union market”.The meeting additionally focused on Georgia’s Anaklia deep sea port project, the  Baku-Tbilisi-Kars railway line and the possibility of scheduling more flights between the two countries.Davitashvili and Jabbarov pointed out the bilateral trade turnover between the two countries had exceeded $1 billion between January and October, making Azerbaijan Georgia’s sixth largest trade partner and third largest export partner.The officials also touched on the “growing volume” of Azerbaijani investments in Georgia’s economy,  noting  2023 figures represented a year-on-year increase of 3,018 percent. The Ministry added Azerbaijani investors were showing interest in transport, logistics, construction, financial services, industry, real estate, communications and other sectors in Georgia.

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The NBG noted that this achievement represents the fourth time the NBG has been awarded this prestigious certification.“For over a decade, the NBG has dedicated significant efforts to aligning with and enhancing international information security management standards. The institution places paramount importance on safeguarding the availability, confidentiality, and integrity of information,” reads the statement.“Ensuring information security on a global scale is a significant challenge today. As the manager of critical business systems, the National Bank of Georgia must implement secure business operations, which directly enhances the reliability of banking services,” stated Natia Turnava, Acting Governor of the National Bank of Georgia. “This year, the NBG successfully met the updated requirements of ISO/IEC 27001:2022. Compliance with this standard is crucial not only for the NBG as a central institution but also for the overall development of the financial sector.”The audit process involved both Georgian and international companies. The certification was issued by TÜV SÜD Management Service GmbH, a renowned German certification body.

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The Banking Association will study the arguments of the National Bank of Georgia on increasing the 3-point scale to 5 - how proportional are the new rates of 0.5% and 1% to assets, capital, threats, challenges, expectations...The National Bank of Georgia submitted a draft amendment to the penalty rules, which will add 0.5% and 1% to the 0.01%; 0.05%; 0.1% penalty rates, for discussion last week and will finalize it next week.The regulator cites a 15-year trend of 10.8-fold growth in banking sector assets (04/2009 – 8.3 billion; 09/2024 – 90 billion).However, it is noteworthy that the threshold increased in the meantime, in 2018, when the Responsible Lending Framework and a number of regulations came into effect, including the GEL 200,000 threshold for foreign currency lending, which has already been raised to GEL 400,000.According to financiers, a 10-fold increase in the sanction rate between 2018-2024 interval should not only follow the trend of asset growth. There are many other circumstances to consider, including the banks' own funds in financial indicators and the increased cost of resources.In addition, since the last change, when the maximum limit was raised to 0.1%, only 6 years have passed, not 15. Assets have also increased 2.6 times compared to 2028 (04/2018 – GEL 34.3 billion), not 10 times. As of 09/2024, the chartered capital of the banking sector is 13.3 billion GEL.According to the current rules, which were updated in April 2018, for failure to comply with the requirements (restriction, limit, prohibition...), the bank is fined 0.01%, 0.05%, 0.1% of the regulatory capital (how much it has at the time of violation), not less than GEL 20,000, and the maximum is exceeded.In addition, the revised rule also sets fixed fines, which have increased compared to the previous one, 2009. These include 5,000 GEL for violation of reporting rules, 10,000 GEL (for each case) for failure to submit documents related to bank administrators. 20,000 GEL for repeated violations and 50,000 GEL for multiple violations.(See: 10, 8​1, 8​2) Source: BRGAccording to the draft amendment to the rule for determining monetary fines for commercial banks and their administrators, the maximum 1% limit is not a ceiling. Under the current rule, a bank paying a maximum of 0.1% will have to pay each time if it violates it again.To make it more impressive, the new draft tariffs will see the largest capital TBC Bank pay 65 million if a 1% sanction is imposed, and the smallest - Silk Bank - half a million.The draft amendments mention the harmonization with EU legislation in the explanatory memorandum and refer to the document within the framework of the relevant EU legal regulation, namely Directive 2013/36/EU of 26 June 2013 on the prudential regulation of credit institutions (CRD).Previously, harmonization was also announced in the area of ​​transparency. The supervisor intends to fully disclose information on fines in the future, just as it has already done on AML violations.

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The prices for mining and quarrying increased by 4.6 percent compared to September 2024, resulting in a 0.3 percentage point contribution to the overall monthly PPI change. In the same period, the prices for manufactured products decreased by 0.8 percent, contributing -0.62 percentage points to the monthly index change. Within the group, a noteworthy price decrease was registered for food products (-3.5 percent). Besides, the prices increased for electricity, gas, steam and air conditioning by 2.1 percent, contributing 0.22 percentage points to the monthly index change.The annual PPI rate was mainly affected by price changes for the following products:  Mining and quarrying: the prices were 29.7 percent higher, contributing 1.7 percentage points to the overall annual index change. Within the group, the prices were higher for the subgroup of metal ores (35.9 percent); Manufactured products: the prices increased by 5.3 percent, contributing 4.32 percentage points to the overall annual index increase. There was a notable increase in the prices for the following subgroups: food products (6.6 percent) and basic metals (11.8 percent); Electricity, gas, steam and air conditioning: the annual price increase amounted to 4.4 percent, which contributed 0.54 percentage points to the annual index change; Water supply, sewerage, waste management and remediation services: the annual price increase amounted to 10.9 percent, which contributed 0.26 percentage points to the annual index growth.

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In the mentioned period, the prices for manufactured products increased by 0.6 percent. Compared to October 2023, the DPPI increased by 3.7 percent. The prices went up for mining and quarrying by 9.8 percent, for manufactured products by 2.4 percent, for electricity, gas, steam and air conditioning by 6.3 percent and the prices for water supply, sewerage, waste management and remediation services increased by 9.2 percent.

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As of the document, compared to October 2023 the XPI increased by 11.2 percent. The prices for mining and quarrying increased by 36.2 percent, for manufactured products by 8.5 percent and for water supply, sewerage, waste management and remediation services by 17.2 percent. In the same period, the prices for products from electricity, gas, steam and air conditioning decreased by 15.3 percent.

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In the III quarter of 2024, compared to the corresponding period of the previous year, the number of hired employees increased by 31.2 thousand persons (3.3%) and reached 974.4 thousand, while the number of self-employed - by 9.9 thousand (2.4%) and equaled to 432.7 thousand. In the same period, the number of unemployed decreased by 26.4 thousand (10.5%) and equaled 225.7 thousand.In the III quarter of 2024, the labour force participation rate (share of the labour force in the total population aged 15 and older) increased by 1.0 percentage points compared to the corresponding period of the previous year and became 54.7%, while the employment rate increased 1.8 percentage points and amounted to 47.1 percent. In urban settlements, the labour force participation rate increased by 2.0 percentage points compared to the corresponding period of the previous year, while in rural settlements it decreased by 0.3 percentage points. The employment rate increased by 3.2 percentage points in urban settlements, in rural settlements it remained unchanged and equaled 48.7 and 44.8%, respectively.In the III quarter of 2024, compared to the corresponding period of the previous year, the share of hired employed in the total number of employed increased by 0.2 percentage points and equaled 69.2%.In the III quarter of 2024, compared to the corresponding period of the previous year, the unemployment rate decreased in urban settlements by 2.6 percentage points while in rural settlements - by 0.5 percentage points.Traditionally, the unemployment rate is higher for men than for women. In the III quarter of 2024, compared to the corresponding period of the previous year, this rate decreased by 1.3 percentage points for women and by 2.0 percentage points for men, equaling 11.5 and 15.6 percent, respectively.The labour force participation rate is higher for men than for women. In the III quarter of 2024, the indicator for women was 44.9 percent and for men – 66.1 percent. The labour force participation rate for women increased by 1.9 percentage points, while for men it increased by 0.2 percentage points, compared to the corresponding period of the previous year.In the III quarter of 2024, the employment rate for women increased by 2.2, while for men - by 1.5 percentage points, compared to the corresponding period of the previous year.

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In January-October 2024 the share of the top ten trading partners by exports in the total exports of Georgia amounted to 81.9 percent. The top partners were Kyrgyzstan (USD 1 047.8 million), Kazakhstan (USD 714.3 million) and Azerbaijan (USD 611.0 million).In January-October 2024 motor cars claimed the first place in the list of top export items, equaling USD 2 000.4 million with 36.6 percent of total exports. The exports of ferro-alloys totaled USD 310.5 million and their share in the total exports amounted to 5.7 percent. The exports of wine of spirituous beverages occupied the third place standing at USD 242.0 million and constituting 4.4 percent of the total exports.The top import commodities in January-October 2024 were motor cars, whose imports equaled USD 2 718.0 million (20.0 percent of the total imports). The petroleum and petroleum oils followed in the list with USD 1 090.5 million (8.0 percent of imports). The Medicaments put up in measured doses were third in the top import commodity list with USD 513.1 million (3.8 percent of imports).

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