It is rather difficult to maintain the current positive economic growth data, but this is an important goal of the government, the vice premier said.
The increase in exports and the recovery of tourism will ensure the growth of the Georgian economy from the beginning of 2022, said Deputy Prime Minister, Minister of Economy and Sustainable Development Levan Davitashvili.
According to statistics, the real GDP growth of Georgia in June 2022 amounted to 7.2% compared to the same period in 2021. In addition, the average real growth rate for the second quarter was 7.2%, and for six months – 10.5%.
“The increase in exports, investments and the recovery of tourism were the factors that determined the further course of economic growth at the beginning of the year,” Davitashvili told reporters.
According to the minister, it is rather difficult to maintain the current positive economic growth data, but this is an important goal of the government.
“In the context of the situation created in the region, increased inflationary pressure, which certainly complicates the government’s decisions, we need to balance economic growth so that we do not have too high inflation, and gradually reduce inflation, return it under control,” the minister said.
Davitashvili believes that this is being implemented by the steps taken by the government, on the one hand, and the National Bank, on the other. In addition, the head of the Ministry of Economy called the decisions of the National Bank quite consistent.
The Monetary Policy Committee of the National Bank in early August maintained a tight monetary policy and left the refinancing rate at 11%.
“Uncertainty remains at a high level, and future trends significantly depend on the development of geopolitical events in the world,” the regulator explained his decision.
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In addition, the minister recalled a significant increase in investment in Georgia, which also has a positive effect on GDP growth.
According to statistics, the volume of foreign direct investment in Georgia in the first quarter of 2022 increased by 4.3 times compared to January-March 2021 and amounted to $568.2 million.
“The main countries were the European Union, the United States, and then the countries of the region, Turkey, etc. in terms of foreign direct investment, which are quite diversified, strong and allow predicting sustainable economic development,” Davitashvili said.
Among the important factors developing the economy, the minister named tourism.
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“We were able to accept new tourist flows. Unfortunately, we were not able to completely exit the traditional tourist markets, among which we often talk about Russia. If you look, compared to the data of 2019, the flow of tourists from Russia has decreased,” he said.
According to Davitashvili, the fears expressed by the opposition in connection with the allegedly large flow of Russian tourists to Georgia do not correspond to reality.
The minister noted that the number of tourists arriving in the country from Azerbaijan and other neighboring countries does not even closely match the data of 2019. At the same time, tourists with high purchasing power come to Georgia from new destinations: the Persian Gulf, the countries of the Middle East, Southeast Asia, and so on.
“These are important determinants that ensure economic growth today,” Davitashvili concluded.
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Georgia’s income from international travelers for the six months of 2022 increased three and a half times and amounted to $1.142 billion. Visitors from Russia spent the largest amount during this period – $218.7 million.
After a 6.8% decline in the economy in 2020, a fairly rapid recovery process has been underway since April 2021, which is reflected in almost all economic parameters. This is the growth of exports and imports, money transfers and an increase in the turnover of enterprises.
According to preliminary data, Georgia’s economic growth in 2021 amounted to 10.4%.
