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.
Georgia Secures Visa-free Travel to Hong Kong
Starting September 30, Georgian citizens can travel to Hong Kong without a visa for 30-days, according to Georgia’s Ministry of Foreign Affairs.
Georgian citizens have been able to travel to China without a visa since May 28, 2024. Hong Kong, a special administrative district, has autonomy over its immigration and visa policy.
Asian Development Bank Forecasts Boost in Georgia’s Economic Growth in 2024
The Asian Development Bank predicts Georgia’s gross domestic product (GDP) will grow by seven percent this year, up two percent from its April forecast. The two-point increase is driven by strong growth in the service sector and domestic consumption.
The report also noted low inflation, the relatively stable exchange rate and cautious fiscal policy, which it says helped Georgia avoid faster price increases.
The Asian Development Bank underlined the increased political instability and geopolitical risks for the exchange rate and current account.
The forecast for 2025 remains constant at 5.5 percent.
Service Industry Drives Economy Growth
Galt&Taggart reports that Georgia’s economy is growing faster than expected, driven by the services sector. Prior to the 2020 pandemic, the main economic driver was consumption. A shift to investment driven growth was noted in 2022-2023, according to Galt&Taggart.
The report argues that further growth in productivity in the service sector is critical for economic growth. The sector is the largest employer with 71.2 percent of total employed workforce. Galt&Taggart notes that, in 2023, real GDP created by one worker in the service sector amounted to 45,000 lari (compared to 35,000 lari in 2017), in industry – 49,000 lari (compared to 40,000 lari), in agriculture – 17,000 lari (compared to 11,000 lari).
FDI in Georgia Up in Q2 of 2024
Foreign direct investment increased by 10.3 percent in Q2 of 2024 compared to the same period last year, according to the national statistics office.
The estimated FDI equaled $574.3 million in Q2, with growth driven by equity investments and debt obligations. The statistics office noted that reinvestment made up 78.6 percent of the total FDI or $451.3 million, down 8.9 percent year-on-year. Equity investments accounted for 17.6 percent, or $101 million, increasing by 36 percent year-on-year. FDI in the finance and insurance sector rose by 38 percent to $300.1 million compared to Q2 of 2023.
Trade accounted for 13.8 percent of the total FDI, or $79.2 million (a year-on-year reduction of 4.6 percent). Manufacturing was next with $55.5 million, a year-on-year growth of 36 percent.
New Direct UK-Georgia Flights Announced
On September 18, British Airways and budget airline EasyJet announced new direct flights between the UK and Georgia starting in spring 2025. British Airways is scheduling four flights a week and EasyJet is planning two flights a week.
Georgian Government Approves Two Wind Farm Projects
The Georgian government approved agreements on wind farms’ feasibility study, construction, ownership and operation with LLC Karis Nakadi (Zemo Imereti wind farm) and LLC Kari Energy (Terjola wind farm).
The agreements now move to the Ministry of Economy and Sustainable Development, where the minister is expected to sign them.
Georgia Assessed at Tier 2 in Global Cybersecurity Index
The Global Cybersecurity Index for 2024, published by International Telecommunication Union (ITU), scored Georgia 91.92 points, placing it at Tier 2 (Advancing). The country received the maximum 20 points in legal measures and cooperation measures; technical measures was scored at 19.25, organizational at 16.35, and capacity development received the lowest score at 16.32.
Average Salaries Increase in Georgia
In Q2 of 2024, the average salary in Georgia rose by 11.1 percent year-on-year to 2,004 lari per month, Georgia’s official statistics body reported.
The sectors with the highest salaries were information and communications (3,963 lari, 4.3 percent y-o-y growth); finance and insurance (3,642 lari, 14.5 percent growth); and construction (2,946 lari, 13.7 percent growth).
In a study of salaries in August, PMCG found that 28.9 percent of employed individuals in Georgia receive a monthly salary of 2,400 lari—five percent higher year-on-year.