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GEORGIA: Foreign direct investment and extrenal trade are on the rise

posted onDecember 14, 2017
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Foreign direct investments (FDI) in Georgia amounted to USD 594.5 million in the third quarter of 2017, up 17.6 percent from the adjusted data of the same period last year, according to a report by Geostat, the National Statistics Office of Georgia.

The share of FDI by three major economic sectors reached 61.6 percent the report showed. The largest share of FDI was allocated in transports and communications, reaching USD 177.8 million, followed by construction with USD 116.2 million, and the energy sector with USD 72.3 million. FDI in Georgia amounted to $1346.5 million in the first nine months of 2017, which is 2.9% more than the adjusted data for the same period last year.

FDI in different sectors in the first nine months of 2017
1. Transport&communication - 447 million USD, 3.2% decrease y/y
2. Construction - 241 million USD, 67% increase y/y
3. Financial sector - 156 million USD, 12% decrease y/y
4. Trade, Education and Service - 117 million USD,  27% increase y/y
5. Real Estate - 116 million USD, 40% increase y/y
6. Energy sector - 98 million USD, 28% decrease y/y
7. Hotels and Restaurants - 75 million USD, 74% increase y/y
8. Processing industry - 46 million USD, 58% decrease y/y
9. Mining industry - 39 million USD, 2.1% decrease y/y
10. Agriculture and fisheries - 9 million USD, 61% increase y/y

According to statistics, Azerbaijan was the largest investor country in Georgia in the third quarter of this year (25.9 percent), followed by Turkey (23.3 percent), United Kingdom (10.7 percent) and the Netherlands (10.4 percent). FDI is expected to reach about USD 1.5 billion this year, roughly on par with 2016 levels, according to Santander Bank. The biggest FDI investor in 2016 was Azerbaijan, with the transport and communications sectors the biggest beneficiaries. Some of the large Georgian companies are registered in the European Union, therefore their turnover is also perceived as a foreign investment.

Georgia's external trade  grew by 12.9 percent this year and reached $9563.9 million in January-November 2017, Geostat preliminary data showed.This year the value of Georgia’s exports increased by 27 percent to $2439.8 million, while the value of imports also increased 8.8 percent to $7124.1 million with respect to January-November 2016.The trade deficit equaled USD 4684.3 million this year and its share in trade turnover constituted 49.0 percent. Trade deficit is an economic measure of the negative balance of trade in which a country's imports exceed its exports. 

Also, Georgia ranked 16th out of 190 economies in the 2017 World Bank Doing Business report, an improvement compared to the last year (when it ranked 24th).