Why We Invest in Georgia

Leading economy in the region on the back of wide sector activities

• Diversified non-commodity reliant economy with consistently high GDP growth across the last decade

Investment-led GDP growth 

• Development of large public infrastructure programmes backed by multilateral international funding driving potential GDP growth.
• Infrastructure expenditures have reached record-high levels in 2019-2021 and are planned at another high of 8.8% of GDP in 2022, with public investment set to continue supporting growth in the medium run.

• Economic resilience has been underscored by a double-digit real GDP rebound of 10.6% in 2021, as the economy also overtook its 2019 level by 3.2%. Real GDP growth reached 10.2% in 9M22, maintaining pace.

Historically low inflation with 3% target set from 2018 by National Bank of Georgia

• Inflation, like elsewhere around the world, was elevated at an annual 9.6% in 2021 due to the COVID-19-induced supply side pressures and swiftly recovering domestic demand, with the National Bank of Georgia tightening the monetary stance (monetary policy rate highest since 2008 at 11% as of November 2022) and reaffirming commitment to achieving the 3% inflation target. With the Russia-Ukraine war exacerbating inflationary pressures, inflation is expected to slowly decelerate but remain above the target during 2022.

Top performer globally in WB Doing Business over the past 12 years

• Liberty Act (effective January 2014) ensures a credible fiscal framework.
• Fiscal deficit/GDP capped at 3%; Public debt/GDP capped at 60%.
• As a  testament of safeguarding prudent and credible fiscal policy, the Liberty Act-mandated three-year consolidation plan has been ratified following the COVID-19 shock in order to ensure compliance with the fiscal rules.
• Business friendly environment and low tax regime (attested by favourable international rankings).

A natural transport and logistics hub, connecting land-locked energy rich countries in the east and European markets in the west 

• Access to a market of 2.8 billion customers without customs duties: Free trade agreements with EU, China, Hong Kong, CIS and Turkey and GSP with USA, Canada, Japan, Norway and Switzerland; FTA with Israel and India under consideration.
• Tourism inflows stood at US$ 3.3 billion in 2019 and international travelers reached 9.4 million in 2019 (up 7.8% y-o-y), out of which tourist arrivals were up 6.8% y-o-y to 5.1 million.
• Tourism revenues rebounded to 98% of 2019 level in 9M22 (including over 121% of 2019 level in 3Q22), with Georgia, as an already established tourism destination, looking upon the tourism sector bouncing back as a major growth contributor once the pandemic is over.
• Regional energy transit corridor accounting for 1.6% of the world’s oil and gas transit volumes.

An influx of foreign investors on the back of the economic reforms have boosted productivity and accelerated growth

• FDI stood at US$ 1.2 billion (6.1% of GDP) in 2021.
• FDI has averaged 8.2% of GDP across the last 10 years.
• Sovereign credit ratings were upgraded in 2019 and maintained in 2020 despite the COVID-19 shock.
• After repaying 10-year, 6.875% coupon Eurobonds issued in 2011, in April 2021, the Georgian government priced USD 500 million, 5-year Eurobonds at a record low coupon rate of 2.75%, with demand reaching four times the amount of issue, underscoring investor confidence, yielding a competitive edge over comparable countries and providing a favorable benchmark for future securities.

Georgia and the EU signed an Association Agreement and DCFTA in June 2014

• Visa-free travel to the EU is another major success in Georgian foreign policy. Georgian passport holders were granted free visa entrance to the EU countries from 28 March 2017. 
• Discussions commenced with the USA to drive inward investments and exports. 
• Strong political support from NATO, EU, US, UN and member of WTO since 2000; Substantial support from DFIs, the US and EU.

Developed, stable and competitively priced energy sector

• Only 20% of hydropower capacity utilized; 155 renewable (HPPs/WPPs/SPPs) energy power plants are in various stages of construction or development.
• Georgia imports natural gas mainly from Azerbaijan.
• Significantly boosted transmission capacity in recent years, a new 400 kV line to Turkey and 500 kV line to Azerbaijan built, other transmission lines to Armenia and Russia upgraded.
• Additional 2,000 MW transmission capacity development in the pipeline, facilitating cross-border electricity trade and energy swaps to Eastern Europe.

• Georgia underscored its commitment to European values by securing a democratic transfer of political power in successive parliamentary, presidential, and local elections and by signing an Association Agreement and free trade agreement with the EU. 
• New constitution amendments passed in 2013 to enhance governing responsibility of Parliament and reduce the powers of the Presidency.
• Russia began issuing visas to Georgians in March 2009; Georgia abolished visa requirements for Russians – Russia announced the easing of visa procedures for Georgians citizens effective December 23, 2015. 
• Direct flights between the two countries resumed in January 2010. However, they have been banned again since July 2019 following the decision from Russia.
• Member of WTO since 2000, allowed Russia’s access to WTO; In 2013 trade restored with Russia. 
• In 2021, Russia accounted for 14.4% of Georgia’s exports and 10.2% of imports.