Resume: The GDP growth rate reached 10.6% in 2021, followed by 11% in 2022 and 7.8% in 2023. Preliminary data show that the economy grew by an additional 9.5% in 2024. As a result, the average annual growth rate constituted 9.8% for 2021-2023 and 9.7% for 2021-2024.
The reasons for the aforementioned trends are also significant beyond the raw statistics. The economy contracted substantially by 6.3% in 2020 due to the pandemic-related regulations, whilst the primary driver of growth in 2021 was the reopening of businesses as they were granted the right to resume operations. Notably, many countries worldwide experienced a sharp economic decline in 2020 and a strong expansion in 2021 similar to Georgia.
Remittances from Russia increased fivefold, exceeding USD 2 billion in the first year of the Russia-Ukraine war. Whilst these remittances declined in 2023-2024, light vehicle exports grew even more substantially, surpassing a fivefold rise. The growth was particularly striking in Central Asian countries. Auto exports surged by 3,100% in Kazakhstan alone in 2024 as compared to 2021 whilst the rise in exports to Kyrgyzstan reached 6,600%.
Simply citing numbers with no further context may create a false impression that high growth was driven by major reforms in the economy, which is inaccurate. Foreign direct investment declined in 2023-2024 (the first three quarters of 2024) and domestic exports in 2024 remained below the 2021 levels.
In recent years, high economic growth has not been exclusive to Georgia. In 2022, Armenia’s economy grew by 12.6% and by 8.3% in 2023. Kyrgyzstan’s economy expanded by 9% and 6%, while Tajikistan’s grew by 8% and 8.3%, respectively. Preliminary data suggests that in 2024, the growth rate in these countries was also 6% or higher. All of these countries have strong economic ties with Russia. Although this factor did not have an additional impact on the verdict, the data supports the view that one of the reasons for Georgia’s high economic growth was the Russia-Ukraine war and the resulting changes in international trade patterns.
Given the accuracy of the cited data but the omission of key details, FactCheck concludes that Irakli Kobakhidze’s statement is MOSTLY TRUE.
Analysis
When commenting on the economy, Irakli Kobakhidze stated: “Due to efficient governance and forward-thinking policymaking, economic growth in Georgia from 2021 to 2023 averaged 9.7%.”
Georgia has recorded double-digit economic growth for two consecutive years following the pandemic with the growth rate reaching 10.6% in 2021 and 11% in 2022. This above-average growth continued into the following years – particularly, the Georgian economy grew by 7.8% in 2023 and by 9.5% in 2024, according to preliminary data. When averaging the aforementioned figures, the growth rate constituted 9.8% for 2021-2023 and 9.7% between 2021 and 2024.
Graph 1: Georgia’s GDP Growth Rate
Source: National Statistics Office of Georgia
Many countries worldwide experienced a sharp economic decline in 2020 and a strong expansion in 2021 similar to Georgia with some of these fluctuations breaking decade-long records. The global economy contracted by 2.9% in 2020 according to World Bank, marking the largest decline in 64 years (data are available from 1961). Moreover, a growth rate higher than the 6.4% recorded in 2024 had previously occurred just once in 1964 when global growth constituted 6.6%.
The Russia-Ukraine was had a notable impact on growth in 2022. Remittances from Russia alone surged by 400%, exceeding USD 2 billion.
The effects continued in the subsequent years. Although remittances from Russia decreased, total re-exports of light vehicles rose sharply. Passenger car exports from Georgia increased by 430% in 2024 as compared to 2021, including a 3,100% rise in exports to Kazakhstan and a 6,600% surge in Kyrgyzstan.
The astronomical rise in auto exports to Central Asian countries highlights the consequences of the war, rather than a violation of sanctions. Georgia’s direct light vehicle exports to Russia virtually ceased following the imposition of strict sanctions, with only eight cars sold in Russia in 2024 – 620 times fewer than in 2023. Notably, if a country like Kyrgyzstan sells cars imported from Georgia to Russia, then Kyrgyzstan becomes the violator of sanctions, not Georgia, as sanctions only apply to Russia and Belarus. FactCheck cannot definitively confirm whether cars imported from Georgia are sold in Russia; however, the fact that the average export value of a car in a country poorer than Georgia amounts to USD 34,565 raises significant questions. Additionally, data from the Kyrgyz Statistical Committee indicates that Kyrgyzstan purchased only USD 61 million worth of passenger cars from Georgia in 11 months which is 17.6 times less than the exports recorded from Georgia to Kyrgyzstan in January-November.
Graph 2: Auto Exports (USD Million)
Source: National Statistics Office of Georgia
The increase in remittances and light vehicle exports are the main effects of the Russia-Ukraine was but this has also influenced the real estate market and tourism. Whilst it is difficult and almost impossible to precisely identify exactly how many percentage points these factors, along with the reopening of businesses in the post-pandemic period, contributed to accelerating economic growth, it is nevertheless clear that they have had a notable impact.
No significant economic reforms have been implemented since the pandemic. Foreign direct investment fell by 15% in 2023 and decreased by an additional 40% in the first three quarters of 2024 as compared to the same period the previous year. Domestic exports in 2024 slightly exceeded the 2023 figures but still remained below the 2021-2023 levels. Furthermore, the number of employed individuals in 2023 increased by 3% as compared to 2019 with a 7% rise in the public sector and only a 1.8% increase in the private sector.
Given the accuracy of the cited data but the omission of key details, FactCheck concludes that Irakli Kobakhidze’s statement is MOSTLY TRUE.
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