Investment News

Investor.ge provides a brief update on investments and changes in government policy that could impact the business environment. Information in this issue was taken from agenda.ge and other sources.

World Bank projects 4.8% economic growth for Georgia in 2024
The Georgian economy is projected to grow 4.8% in 2024, according to the latest edition of the World Bank’s Global Economic Prospects report, published on January 10. The report says growth is expected to ease this year, reflecting a projected slowdown among trading partners of Georgia as well as further reductions in money transfer inflows.
“Monetary policy is expected to be eased to support economic growth while remaining prudent,” it notes. It also highlights that Georgia’s 6.5% economic growth in 2023 was higher than expected thanks to a “rebound in private consumption coupled with continued recovery in tourism, which helped offset a decline in money transfer inflows.”
The report also projects that inflation is expected to be below its 3% target rate at the end of this year after declining “sharply” in 2023, driven by lower commodity prices (particularly for food and fuel) along with a strong Georgian lari.
Georgia’s mountain resorts host international ski competitions
The International Ski and Snowboard Federation’s Moguls World Cup competition kicked off in Bakuriani on December 22, marking the first of several competitions slated to be held at Georgian ski resorts during the 2023-2024 ski season. The tournament was broadcasted live in 17 countries and featured 90 athletes from 16 countries.
During the 2024 winter season, stages of the World Cup will also be hosted in the Georgian resort of Gudauri for snowboard cross between February 3-4, and the ski cross event will run in Bakuriani between February 10-11.

Standard & Poor’s affirms Georgia at BB/B with stable outlook
Standard & Poor’s Global Ratings has affirmed Georgia’s long and short-term foreign and local currency sovereign credit ratings at ‘BB/B’ with a stable outlook. The S&P positively assessed the country’s progress achieved in economic growth and fiscal consolidation and noted that it expects the trend to continue in 2024, the Georgian Ministry of Finance reported on February 10.
In its assessment, the ministry quoted the S&P as saying the parameters of the budget planned for 2024 indicated “a high level” of fiscal discipline, emphasizing that low levels of government debt were “a strength of the rating.” It also positively evaluated the achievement of European Union candidate status by Georgia in December 2023 and said it expected that this development would further encourage reforms in the country.
This follows a January assessment by Fitch Ratings, which affirmed Georgia’s long-term foreign-currency issuer default rating at ‘BB’ and assessed the financial outlook for the country as “positive.”

National bank reduces refinancing rate to 9%
The National Bank of Georgia (NBG) on January 31 said it was continuing its exit from a tight monetary policy by reducing the refinancing rate by 50 basis points down to 9% in light of the “low inflationary environment.”
Acting Governor of the National Bank Natia Turnava noted at a press conference that the body had begun reducing its strict monetary policy in May of last year. “Since then, the monetary policy has been reduced by 2%, although we still have one of the highest rates in the wider region,” Turnava told the press. In its decision, the NBG attributed low inflation to both domestic and external factors, including tight monetary policy and lower inflation expectations that it said had led to a downward trajectory of prices for domestically produced goods.
In its assessment, the central bank projected economic activity in 2024 will “gradually normalize” in line with the growth rate of GDP, which it estimates will be around 5%. The body noted the granting of the European Union candidate status for Georgia in December had “visibly reduced” the sovereign risk premium, which could result in a lower neutral policy rate. However, it warned that inflationary risks caused by the ongoing “acute geopolitical environment” will continue to create uncertainty in shipping costs, a trend that it plans to continue monitoring closely.

Enterprise Georgia launches program to support capital market development
Enterprise Georgia, the state agency that promotes entrepreneurship, investment, and exports, on February 12 announced the launch of its Capital Market Support Program, which aims to improve access to finance for domestic enterprises. The program, implemented together with the USAID Financial Innovation Program, will promote capital market development and stimulate the issuance of securities.
CEO of Enterprise Georgia Mikheil Khidureli discussed the new program at a working meeting with representatives of the Ministry of Economy and brokerage companies. Khidureli said the agency was moving to a “new stage” by offering the program, which will feature two components: co-financing and technical support. Co-financing will help offset the costs of credit rating and successful placement fees, while technical support will offer training and the financing of consulting services. The program plans to support 15 companies and assist them in issuing bonds in 2024. The agency’s head added that it plans to implement “a number of measures” to contribute to the development of “alternative financing mechanisms” as part of efforts to develop the country’s capital market.

IFC report: renewables, transport and logistics, digital transformation will be key sectors for Georgia’s growth
A new report published at the end of December by the International Finance Corporation (IFC) identified renewables, transport and logistics, and digital transformation as key sectors to boost Georgia’s private sector-led growth and help the country reach high-income status.
The IFC’s Vice President for Europe, Latin America, and the Caribbean Alfonso Garcia Mora said reforms in these key sectors could help the country realize its renewable energy potential, increase its participation in global value chains, and drive productivity. “Attracting private sector investment would be key, and the IFC is ready to underpin these efforts,” he said.
World Bank Regional Director for the South Caucasus Rolande Pryce said Georgia had the potential to “further unleash” private sector development. “As the report shows, this could be achieved by increasing the enforcement and predictability of laws and regulations as well as by supporting connectivity and logistics, digital transformation, and green investments as catalyzers of growth,” she said.
Here are the key sectors identified by the Georgia Country Private Sector Diagnostic report:
Renewable energy. The report says Georgia boasts a substantial renewable energy potential of 18 gigawatts (with less than 20% currently harnessed) and says the country would benefit from clear and reliable policy as well as a regulatory and permitting framework and sustainable incentive schemes to tap into this potential.
Transport and logistics. To accomplish the goal of becoming a regional logistics hub, the report suggests Georgia expand the capacity of seaports, strengthen information flows and data accessibility, and improve the reliability of railroad operations, among others. “Enhancing connectivity along the Middle Corridor [a multimodal transport corridor connecting China to Europe through the South Caucasus] would facilitate the integration of Georgia into the global economy,” it notes.
Digital business. The report names e-commerce and financial technology among the “most promising” digital subsectors, suggesting the country foster programming skills and address challenges related to technology and early-stage finance.

Kutaisi airport continues trend of rising flight, passenger numbers
Western Georgia’s Kutaisi International Airport served 151,939 passengers in January, a 78% increase compared to the same month in 2023, the United Airports of Georgia announced in February. The number of flights operated from the airport throughout the month also increased by 66% YoY, with the facility serving 486 flights in January.
This strong start to 2024 comes on the back of a record 2023 performance for the airport. The Western Georgian aviation hub, which currently operates flights to 39 destinations in 20 countries, served 1.6 million passengers in 2023, a 103% increase compared to 2022. It also operated more than 5,000 flights throughout 2023, a 57% increase compared to the previous year.
The airport announced that in December, the Hungarian budget airline Wizz Air stationed its fourth passenger jet at the facility and resumed direct flights to the Danish capital of Copenhagen.

Residential property price index up 2.9% in Q4 2023
The residential property price index, which measures the price evolution for residential spaces, increased by 2.9% YoY in the fourth quarter of 2023, the National Statistics Office announced on January 23. The annual increase amounted to 12.8%, Geostat added.
The index covers the market for new residential properties in the capital city of Tbilisi, for both flats and house segments. In the reporting period, a price increase compared to the previous quarter was registered both in flats (+2.5%) and houses (+4.3%), while prices increased by 14.1% annually for flats and 8.6% annually for houses.

E-commerce law becomes fully operational in Georgia
The law for regulating the rights and obligations of intermediary service providers in the e-commerce sector and protecting consumers by making information services more transparent and standardized fully entered into force in Georgia at the start of 2024, the Georgian Competition and Consumer Agency announced.
On January 15, the agency released a statement noting that legal entities and individuals now have the right to submit complaints to the body on alleged violations of the legislation. The primary goal of the law is to protect the rights of trading platforms during electronic commerce and define the rights and duties of intermediary service providers. Unlike the Law on the Protection of Consumer Rights, the Law on Electronic Commerce will govern cases for both legal entities and individuals.

Hundreds of influencers to visit Georgia for Traverse Digital Conference
About 200 influencers from the United Kingdom, the United States, Germany, Poland, Spain and other countries visited Tbilisi for the ninth edition of the Traverse Digital Conference, held from January 30 until February 10 and hosted for the first time in Georgia. The influencers visited the capital city of Tbilisi, the highland town of Mestia, the ski resort of Gudauri, and other places to explore winter destinations, tourist products, cuisine, and wine.
The event was hosted by the Traverse Network, a digital influencer marketing and events agency based in London, which is composed of tens of thousands of digital influencers and content creators including bloggers, YouTubers, Instagrammers, podcasters, videographers, and photographers. The conference featured BBC presenter Gavin Ramjaun, Instagram blogger Rich McCorry, and other influencers with millions of followers on social networks as speakers.
“They will visit Georgia [and] learn about tourist products. I think this conference will be very successful, and later we will be able to follow what the influencers write about the country on international media platforms,” said Head of the Georgian National Tourism Administration Maia Omiadze.

Remittances up from EU and U.S., down from Russia
Remittances to Georgia increased from the United States and European Union in November and were down by 76% from Russia, the National Bank of Georgia said in its latest update of the figures.
Remittances from Russia decreased YoY to $75.3 million, while remittances from the U.S. continued to grow by 42%. Among countries in the EU, remittances from Italy equaled $42.8 million (+20% YoY), Germany equaled $20.3 million (+32% YoY), and Greece equaled $20.1 million (+8% YoY), constituting “significant” contributions to the total amount, the NBG said.
The body noted that money transfers from Kazakhstan had also increased “significantly” YoY, marking a 71% rise in November, but were down from Kyrgyzstan (-86% YoY) and Azerbaijan (-18% YoY).
Overall, Georgian citizens received $292.7 million sent from abroad in November, with the figure marking a 43.8% decrease compared to November 2022. In the same month, remittances leaving Georgia totaled $31.3 million.

External trade down 14.9% in January
External trade (excluding non-declared trade) for Georgia amounted to $1.3 billion in January 2024, 14.9% lower YoY, shows preliminary data released by Geostat in February. The value of exports decreased by 26.3% to $338.2 million, while the value of imports decreased by 10.2% and amounted to $1 billion. The trade deficit was $663.4 million, and its share in trade turnover constituted 49.5%.