MINISTRY OF ECONOMY
AND SUSTAINABLE DEVELOPMENT
OF GEORGIA

First Vice Prime Minister, Minister of Economy and Sustainable Development delivered a speech in the Parliament of Georgia within the Minister's Hour format. Levan Davitashvili provided the Members of Parliament with the comprehensive information about the decisions, reforms, current and planned projects in the direction of the development of the economy of Georgia.

"The name of the government's program is 'for building a European state,' which all our decisions respond to. On December 14, 2023, granting Georgia the status of an EU candidate country took the process of our country's European integration to a new level, but at the same time, this decision was a logical continuation of the many years work that our country has done since 2014. It was a difficult path to Georgia's European integration, one stage of which we successfully overcame," – the Minister of Economy and Sustainable Development stated.

As Levan Davitashvili noted, due to the status of the EU membership candidacy, Georgia for the first time joined the process of preparing the medium-term program of economic reforms with the methodology developed by the European Commission for candidate countries and submitted the Economic Reforms Program for 2024-2026 to the European Commission within the stipulated time (January 15, 2024).

The Minister of Economy emphasized that in the background of global and regional challenges, with the rapid trends of economic growth, Georgia is still leading not only in the region, but also among several member states of the European Union. In addition, according to the information of the First Vice Prime Minister, the positive dynamics of economic growth will continue steadily.

Levan Davitashvili stated that the average economic growth in January-February equaled 7,7%, including a 9,5% growth in February. In particular, in the last three years (in 2023, compared to 2020), GDP per capita expressed in USD almost doubled and amounted to 8 210 USD in 2023, while GDP per capita expressed in GEL was 21 575 GEL. In addition, according to the forecast of the First Vice Prime Minister, economic growth will remain at a high level in 2024 and the following years, and GDP per capita by 2024 will exceed 23 100 GEL, or 8 500 USD. 

"In 2023, the record volume of export of goods equalling to 6,1 billion USD was recorded. Revenues from the tourism was increased by 17,3% (by 608,7 million USD) and also reached a record level – 4,1 billion USD," – the Minister of Economy said.

According to Levan Davitashvili, the volume of foreign direct investments remains at a sustainable level - in the last three years, direct foreign investment of about 5 billion USD was made. As of 2023, the current account deficit has also improved and reached 4,3% of GDP (in 2022 – 4,5%), and the healthy structure of its financing is maintained. As for the level of inflation - since April 2023, inflation has remained below the target rate, and the average annual inflation in 2023 was 2,5%. At the same time, the level of inflation was less than 1% during the last 10 months. In 2023, the level of unemployment was decreased to a historical minimum, and a record employment rate was recorded - in 2023, the number of employed persons was increased by 51 thousand and amounted to 335 thousand.

The Minister of Economy and Sustainable Development also spoke about the role of the Middle Corridor. According to his information, in recent years its competitiveness and the amount of the cargo transported via the international shipments by transport branches have increased significantly, the average growth of which has been equaled to 11% in the last three years. According to Davitashvili, in order to increase the competitiveness of the transit corridor, the Ministry of Economy will continue its work in the direction of integration into the international transport systems and deepening of the regional cooperation.

Levan Davitashvili noted that the work will be activated in the direction of economic integration with the European Union - due to the country's status as a candidate for the EU membership, the Ministry of Economy and Sustainable Development is activating work beyond the obligations of the DCFTA in the direction of legislative and institutional rapprochement with the European Union. In addition, the 2024-2025 Georgia-EU DCFTA Priority Action Plan (PAP) was developed together with the European Commission, which will be adopted by the end of 2024.

As for the tourism industry - according to Levan Davitashvili's forecast, this year the income from international tourism will increase to 4,5 billion USD and the country will host 7,9 million international travelers. "The tourism sector in Georgia is growing and developing year by year, despite the challenges in the region and the world. In 2023, 7,1 million international travelers visited the country, which is a 75,6% recovery compared to the 2019 data," the First Vice Prime Minister said.

The Minister of Economy and Sustainable Development highlighted that in 2023, the revenues received from the industry amounted to 4,1 billion USD, thus Georgia not only recovered, but also exceeded the pre-pandemic result by 26,2%. According to him, there is also a sustainable increase in the share of tourist visits in the number of international travelers, which amounts to 4,7 million visits and is equal to a 91,9% recovery of the 2019 data. At the same time, the growth of investments in the tourism sector continues. With the projects planned for 2024-2027, over 1 billion GEL will be invested in the creation of accommodation facilities. As a result, the country will add up to 320 new accommodation facilities with up to 37 100 beds. Most importantly, up to 9 300 new jobs will be created across the country.

In 2024, the expected increase in revenues from international tourism will be 9% compared to 2023, and 37,5% compared to 2019. In addition, 7,9 million international travelers will visit Georgia, which is an 11,2% increase compared to the data of 2023. At the same time, according to the forecast, Georgia will host 5,2 million tourist visits, which in turn represents a 12,1% increase compared to 2023.

In his parliamentary speech, Levan Davitashvili emphasized the importance of the transport and logistics projects. According to him, the priority of the government is to promote the utilization of the real potential, which makes Georgia a multidimensional economic and logistic hub in the region. "In this regard, the Anaklia Deep Sea Port project, which is developing according to the plan, has a special importance," – the Minister of Economy said and added that in 2024, a private partner will be selected for the port project, and the construction of marine infrastructure will also begin - an international tender for the design and construction of marine infrastructure has already been announced.

According to the minister, it is planned to work together with the partner countries in the direction of digitalization of the transit corridor passing through Georgia. The First Vice Prime Minister also drew attention to such projects as the modernization of the Georgian railway, which should be completed in 2024, as well as the Baku-Tbilisi-Kars railway, which will significantly reduce the time required for cargo transportation between Asia and Europe and ensure the attraction of additional cargo flows through Georgia.

In his speech, Levan Davitashvili highlighted large infrastructure projects in the aviation sector. As he noted, the development of the Tbilisi International Airport project is planned in 2024 - according to initial estimates, in the case of the construction of the Vaziani Airport, the capital city will be able to receive over 18 million passengers. In the current year, work will continue in the Kutaisi and Batumi international airports for the purpose of development. Stimulation of domestic flights and construction and development of domestic airports also continue. In particular, in 2024 it is planned to start the construction and complete modernization of the Telavi Airport, as well as the design and construction of the new terminal of the Mestia Airport.

"2023 was an important and successful year for the country's aviation sector. Georgian airports served over 6 million passengers in total, which is 35% higher number compared to the number of passengers carried in the same period of 2022. In addition, the number of flights was increased by 23% last year. The volume of cargo transported by air was also increased by 6%. In the wake of the planned activities, we expect that in 2024 the airports of Georgia will serve a record number of passengers - up to 7 million, which will be a 14% increase compared to the passenger flow of 2023" – Levan Davitashvili noted.