Foreign direct investments (FDI) in Georgia amounted to $165.4 million in Q1 of 2020 which is a 41.7 per cent decrease compared to the same period of 2019, show the latest preliminary data from the National Statistics Office of Georgia (Geostat).
The main reasons which caused a decrease in FDIs included the recent completion of a pipeline project and the transferring of ownership in some companies from non-resident to resident units,” says Geostat.
The share of FDIs by these three economic sectors reached 87.5 per cent in Q1 of 2020.
FDI in Georgia in 2018-2020 in Million US dollars. Photo: National Statistics Office of Georgia.
Georgian Finance Minister Ivane Matchavariani said that the decline in FDIs as well as the 16 per cent decrease of the Georgian economy in April was caused by the coronavirus pandemic
The pandemic started globally far earlier than in Georgia. The Interagency Coordination Council was created at the end of January when there were already expectations [of the coronavirus pandemic],” said Matchavariani.
Georgian Economy Minister Natia Turnava said that the economy is shrinking around the world and also affects the Georgian economy.
This year and the statistics we have in the first quarter of this year are not usual. The economy is shrinking and declining globally. Of course, this will affect investors' attitudes in general, not only towards Georgia. When there is uncertainty on the global market, decisions about investments and new projects is harder, thus the decline we have in FDIs is caused by the pandemic,” said Turnava.
Turnava noted that the Ministry of Economy is working to attract investments in 2021 and noted Enterprise Georgia which has a strategy to attract investments.
Turnava noted that she expects an increase of investments in the energy sector this year.
She also said that the government is working actively to attract investors in Georgia amid the global diversification trends when many companies try to diversify their locations from China after economic interruptions of their activities amid the coronavirus pandemic in the country.