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 2019-2023 and stood at 7.3% of GDP in 2023, with public investment set to continue supporting growth in the medium run.
• Following a 7.5% expansion in 2023, the Georgian economy sustained its growth momentum with preliminary growth of 10.0% in the first eight months of the year.

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

• Inflation, following a global trend, surged during 2021-2022. However, it sharply decreased in 2023, falling below the target from April 2023. By September 2024, headline inflation stood at 0.6%. The National Bank of Georgia continued its gradual monetary policy easing, reducing the refinancing rate to 8.0% with a cumulative 150 basis points cut in 1H24.

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%.
• The general government debt has fallen below pre-COVID levels at 39.2% of GDP by the end of 2023 as GEL has strengthened and the economy has rebounded, while the fiscal deficit reached 2.5% of GDP in 2023.
• 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. Transit trade amounted US$ 3.3 billion in 2023, tripling compared to 2021 level, while growing by 12% y-o-y in 9M24. Moreover, transportation service exports increased significantly on average 34.6% during 2022-2023 and by 19% y-o-y in 1H24, indicating increased importance of the Middle Corridor.
• The tourism sector continues to recover and income from international travel reached US$ 1.9 billion in 1H24 (up 5.2% y-o-y), representing 130% of 1H19 levels, reflecting the global resumption of travel as well as the migration effect. However, the number of international visitors shows only a partial recovery in 1H24, standing at 83% against of 1H19, pointing that significant further growth potential remains.

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

• FDI stood at US$ 1.9 billion (6.2% of GDP) in 2023. FDI has averaged 8.5% of GDP across the last 10 years.
• Moody’s revised Georgia’s sovereign credit rating outlook from Ba2 negative to Ba2 stable in March 2024, while Fitch Rating revised outlook From BB positive to BB stable in June 2024 on the back of increased domestic political uncertainty.
• 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 was granted the EU candidate status in December 2023

• 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. 
• On March 2023 Georgia submitted application to join the EU, a move that was originally scheduled for 2024. On 14 December 2023 the European Council granted the candidate status to Georgia. Granting candidate status to Georgia is a significant acknowledgment by the EU of the progress made in recent years.
• Strong political support from NATO, EU, US, UN and members of WTO since 2000; Substantial support from DFIs, the US and EU.

Developed, stable and competitively priced energy sector

• New Black Sea Submarine Cable Project to connect Caucasus electricity to EU will significantly increase Georgia’s potential to become electricity transit hub.
• 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. In May 2023, Vladimer Putin signed the decree, about the abolishment of the visa regime for Georgian citizens starting 15 May 2023.  In addition, the ban on direct flights to Georgia (introduced in July 2019) was also lifted from May 15, 2023.
• Member of WTO since 2000, allowed Russia’s access to WTO; In 2013 trade restored with Russia. 
• In 2023, Russia accounted for 11% of Georgia’s exports and 11% of imports. While exports and imports to/from the EU accounted 12% and 25% accordingly.