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.

National bank reduces refinancing rate to 8.25%
The National Bank of Georgia (NBG) on March 13 said it was continuing its exit from a tight monetary policy by reducing the refinancing rate by 0.75 pp, down to 8.25%. The NBG said both domestic and external factors had contributed to sustaining a “low inflation environment” in the country, with headline inflation “well below its target.”
“The low inflation environment helps the inflation expectations decline, which further significantly lowers the inflationary risks in the medium term. Other things equal, inflation is expected to remain below the target of 3% at the beginning of 2024, while stabilizing close to it in the medium term,” the NBG said.
The central bank also highlighted that it was continuing to monitor “major inflationary risks” due to global shipping concerns around tension in the Red Sea. “The hostilities in this region are still ongoing; however, shipment costs, after surging in December and January, declined to some extent in February.”
February inflation: prices of clothing, footwear, transport down in Georgia
Prices of clothing, footwear, and transport decreased MoM across Georgia in February, Geostat announced in its early-March update of inflation-related figures.
Overall, the consumer price index in February decreased by 0.04% compared to the previous month, while the annual inflation rate amounted to 0.3%. The annual inflation rate was mainly influenced by price changes for transport (+4.8%), miscellaneous goods and services (+8.6%), alcoholic beverages and tobacco (+5.5%), and food and non-alcoholic beverages (-3.5%).

Georgia’s national football team scores historic place at 2024 Euro competition
Georgia’s national football team made history on March 26 by claiming victory over Greece in the playoff final of the UEFA Euro 2024 and securing its first-ever spot in the major football tournament.
The team, coached by Willy Sagnol, claimed the victory in the penalty shootout by 4:2 at the Dinamo Arena stadium in Tbilisi, with Nika Kvekveskiri, Lasha Dvali, Zuriko Davitashvili and Giorgi Kochorashvili scoring the penalties. Georgian goalkeeper Giorgi Mamardashvili saved the penalty.
The Georgian team will play its first match at the tournament against Turkey on June 18.

OECD upgrades Georgia’s country risk rating
The Ministry of Finance of Georgia on March 15 announced that the country’s risk rating had improved by one level in the credit risk classification of the countries of the Organization for Economic Co-operation and Development (OECD).
The ministry said the improvement would “increase access to financing” for the private sector, adding the rating was based on the assessment of official export credit agencies of OECD member countries. The listing also includes non-member countries, the body added, noting the purpose of classification was to assess solvency risks of countries.

Dutch Transavia, Turkish AJET to operate flights to Georgia this year
Dutch budget airline Transavia and Turkish budget regional airline AJET are launching flights to Georgia this year, the Georgian Civil Aviation Agency announced on March 13. While Transavia will connect Tbilisi and Amsterdam, AJET will carry passengers on Istanbul-Tbilisi flights..
The Amsterdam-Tbilisi connection will be operated twice a week on Wednesdays and Saturdays, between April 20 and late October. For the Istanbul-Tbilisi flights, the services will be available from March 31 to November. These flights will be operated daily, the agency said.

Government announces three-year tax exemption for startups
Georgian Prime Minister Irakli Kobakhidze announced on March 19 a new initiative to enhance the domestic innovation ecosystem by assigning companies a status of “innovative startups” that will make them eligible for three years of tax exemptions.
Speaking at the 10th anniversary of Georgia’s Innovation and Technology Agency (GITA), Kobakhidze said this initiative would be put forward in parliament “in the near future.” The PM said artificial intelligence, phages, and agricultural technology had been defined as primary directions to “maximize the global competitiveness” of the country’s economy and make full use of its scientific potential.

Asian Development Bank launches new country strategy for Georgia
The Asian Development Bank on March 19 launched a new five-year country partnership strategy for Georgia to “help the country develop into a green and inclusive regional gateway.” The strategy, which includes “a particular focus” on regional cooperation and integration, human capital development, and climate action, aims to support Georgia’s sustainable development by strengthening sovereign and private sector investments, policy reforms, capacity, and knowledge.
“The ADB and Georgia have been steadfast partners and we look forward to further helping the country transition to a green and integrated economy and foster a more resilient and inclusive society,” ADB Director General for Central and West Asia Yevgeniy Zhukov said, pledging to continue “to help Georgia leverage its geographical advantage and extensive free trade agreements to become a regional gateway connecting the Caucasus and Central Asia to Europe and the rest of the world.”
ADB Country Director for Georgia Lesley Bearman Lahm said “we are proud to maintain our partnership” with the Georgian government, as the country “continues to develop into a regional transport and trade hub with climate-resilient infrastructure and stronger social security.”
The ADB has supported Georgia since 2007 and is one of the country’s largest multilateral development partners, the bank said, noting that sovereign and private sector loans to Georgia have totaled $3.9 billion.

Infrastructure Minister: Grigoleti-Kobuleti bypass road to open this year
Georgian Infrastructure Minister Irakli Karseladze on March 15 said works on the remaining section of the Grigoleti-Kobuleti bypass highway in the country’s west would be completed this year for the road to open to traffic. Karseladze noted traffic had already been allowed on the 11-kilometer-long, four-lane section of the highway where works were completed.
Once completed, the bypass will connect to the Samtredia-Grigoleti road, with traffic between the seaside towns of Grigoleti and Kobulet directed via the highway, the Ministry of Infrastructure said. “The Samtredia-Grigoleti road will be directly connected to the section of the Kobuleti bypass road, which is important both for the summer season and for daily needs of the population so that travel becomes faster, safer, and more comfortable on the main roads in Western Georgia,” the minister said. Karseladze also noted challenges related to the remaining 3-kilometer section of the road, leading to the contractor and supervisory companies being requested to “increase the appropriate mobilization and resources”.
The construction works of the Grigoleti-Kobuleti main road project include the construction of a 14.4-kilometer, four-lane, asphalt concrete road with 22 bridge crossings, four traffic junctions, water pipes, and underground passages. The project is being implemented within the European Investment Bank’s loan agreement worth GEL 228 million ($86 million).

New lineup of global artists set to visit Georgia under government’s Starring Georgia series
OneRepublic, Scorpions, and Jungle are among the headliners in this year’s Starring Georgia series, a program of performance events aiming to promote the country’s potential in tourism, economy, and culture to put Georgia on the map of international event calendars.
Black Sea Arena, a 10,000-head venue in western Georgia’s seaside town of Shekvetili, on March 28 said OneRepublic would perform on May 10, with Scorpions and Jungle set to come to Georgia on May 31 and August 18, respectively. Online tickets went on sale at the end of March through bsa.ge and tkt.ge.
Initiated by former Prime Minister Irakli Garibashvili, the promotional series was launched last year and has hosted Bruno Mars, Imagine Dragons, The Killers, and other performers in Tbilisi and in Shekvetili.

Georgians receive $272 million in remittances in February
Remittances to Georgia from abroad hit $272.3 million in February, of which $105.62 million came from European Union member countries, the National Bank of Georgia announced on March 15. Overall, remittances were down 26.9%, or $100 million, compared to February 2023.
Transfers from EU states made up 39% of the total volume and were up 15.9% compared to the previous month. Among countries of the EU, remittances from Italy were the highest at $43.97 million (+13% YoY), followed by Greece at $18.99 million (+9% YoY) and Germany at $18.1 million (+23% YoY).
The main source of remittances from other countries came from Russia ($62.2 million), the United States ($41.2 million), Israel ($20.4 million), and Kazakhstan ($10.6 million). In the same month, remittances leaving Georgia totaled $29 million (compared to $27.6 million in February 2023).

National bank hosts Sustainable Finance Forum
The National Bank of Georgia (NBG) on March 7 hosted the fifth edition of the Sustainable Finance Forum, attracting over 200 attendees from 15 countries. The event was organized in collaboration with the International Finance Corporation (IFC), its partner the Swiss State Secretariat for Economic Affairs, and the IFC-facilitated Sustainable Finance and Banking Network (SFBN).
The forum serves as a global platform bringing together senior representatives from the European Union, SFBN member countries, central banks from various regions, local financial institutions, international organizations, private and public sector representatives, universities, and other stakeholders.
Vice Governor of the National Bank Ekaterine Mikabadze opened the event by highlighting the NBG’s commitment to sustainable finance and the “significant progress” made in this domain. “Our journey in sustainable finance has been characterized by progress and collaboration. The urgency of addressing sustainability issues and the pivotal role of the financial sector in supporting sustainable development cannot be overstated. The NBG remains committed to furthering the sustainable finance framework,” she said.
The forum featured discussions on sustainable finance frameworks, with a particular focus on emerging countries. Key topics included the strategies of regulators and market participants in addressing environmental, social, governance, and climate-related risks; the role of taxonomies in supporting sustainable finance; and the importance of disclosure and transparency in the process.

Georgian PM outlines tourism development plans for 2024
Georgian Prime Minister Irakli Kobakhidze on March 5 said revenues from international tourism were expected to reach $4.5 billion this year, while Georgian airports would serve 6.8 million passengers.
He said tourism in Georgia had experienced “rapid growth” over the past few years, adding that despite the setbacks caused by the Covid-19 pandemic, the implementation of “effective policies” had enabled the tourism sector in the country to recover quickly. “As a result, in 2023, the tourism and airline industries in Georgia achieved record-breaking figures,” Kobakhidze said, noting that the country’s international airports served more than 6 million passengers last year.
The Georgian PM noted turnover of the hotel and restaurant industry had increased fourfold since 2012, while the number of people employed in this sector also increased from 28,000 to 40,000, with the average salary of employees increasing “threefold.”
In his comments, the Prime Minister also discussed planned projects that will help to develop the country’s tourism and airline industries. “We are planning to develop the Tbilisi International Airport project, which will serve as a transit and logistics center with advanced passenger and cargo terminals…This year, we also plan to construct and modernize Telavi Airport as well as design and build a new terminal for Mestia Airport. The general development plan for Kutaisi Airport will also be completed this year, and the necessary infrastructure work will commence,” Kobakhidze said.
The head of government also highlighted global events that are planned to be hosted in Georgia, including World Tourism Day and an international forum on business tourism.