Georgia’s education sector revenue totaled GEL 2.6bn in 2022, up 10.5% y/y. Even though, government expenditure on education has tripled over 2010-22, standing at 3.7% of GDP (2022), the indicator is still low compared to EU, where education expenditure accounts for c.5% of GDP. Overall, we expect the education sector to grow by 8-10% annual rate in the medium term, backed by increased state financing and strong demand for educational services.
General education sector revenue was up 11.8% y/y to GEL 1.3bn in 2022. The majority of pupils are still concentrated in public schools in Georgia, but the private sector enjoys rising enrolments and tuition fees due to a higher perceived quality compared to public schools. We believe this trend will continue, backed by increased disposable income, urbanization and positive demographic trends in the medium term. Despite strong growth, the private general education system in Georgia is still fragmented. Only 11 private schools have more than 1,000 enrollments, collectively accounting for 21.0% of the private market as of 2022-23, leaving room to play M&A.
Higher education sector revenue was up 4.5% y/y to GEL 0.8bn in 2022. The majority of students are also concentrated in public universities, but the private sector is gaining a share, mainly driven by very rapidly rising foreign students. Notably, demand has further surged after the relocation of Indian students from Ukraine in 2022, cementing Georgia’s status as an education hub. This is evident as the inbound mobility rate in Georgia, which stands at 15.2%, surpasses the rates of many other countries, including the EU at 8.4% and the US at 5.1%. As of the academic year 2022/23, bachelor-level programs in social sciences, business, and law were the most common, whereas at the master’s level, health and welfare programs were in high demand, primarily due to foreign students.
