Georgia “fastest growing” economy with inflation only at 0.6%, PM tells Georgia-China Business Forum

The Georgian PM on Monday addressed the Georgia-China Business Forum in Beijing. Photo: Government press office, 31 Jul 2023 - 17:51, Tbilisi,Georgia

Prime Minister Irakli Garibashvili on Monday addressed the Georgia-China Business Forum in Beijing and described his country’s economy as the “fastest growing” in the world, while also saying the domestic inflation in June had amounted to only 0.6 percent.

Claiming Georgia had undergone a “significant transformation” over the past decade to create a “more liberal and free market economy”, the head of the Government said his country had become a “desirable destination” for doing business. 

Garibashvili cited the World Bank as saying Georgia ranked third worldwide with the “lowest tax pressure”, with an average total tax rate at 9.9 percent, which he said had made the country “attractive” for foreign investors, before adding Tbilisi offered visa-free travel to citizens of 98 states around the year.  

The head of the state noted his Government also offered support mechanisms like a preferential tax regime to foreign companies operating in export-oriented information technology sector.

He said the benefit included only five percent in income tax, instead of 15 percent, and five percent in profit tax instead of 20 percent. 

Noting his Government’s approval of the country’s development strategy - Vision 2030 - last year, which the PM said was a “far-reaching” document to promote the country’s sustainable economic growth, social equity, security and stability, Garibashvili claimed the “tireless work” of the country’s authorities had ensured domestic economic growth amid the global downturn. 

He claimed transport, logistics, financial services, construction, energy and tourism sectors had shown a double-digit economic growth for two consecutive years “thanks to strong economic policies and increased activity”, with a gross domestic product growth rate hitting 10.1 percent in 2022, up from 10.5 percent of the previous year. 

This positive trend continues in 2023 and the average economic growth rate in the period from January to June was 7.6 percent”, he said. 

Citing forecasts of the International Monetary Fund, the official said Georgia was expected to show the “fastest economic growth” among the South Caucasus and European countries in the medium term, between 2023-2028, with a projected growth rate of  5.1 percent. 

Saying inflation has become a global challenge for many powerful economies around the world, Garibashvili told the Forum “effective measures” by his Government had curbed inflation in June to only 0.6 percent. 

It is expected that this year inflation will remain below the forecast indicator”, he added.

He also noted Georgia's economic achievements had received "global recognition" from various international institutions, adding Fitch Ratings had increased his country’s outlook from BB "stable" to BB "positive". 

This positive change is the result of our effective governance, as well as [the country’s] economic development and a sound macro-fiscal policy framework. These positive ratings emphasise confidence in Georgia's economic prospects and management of sectoral policies”, he said. 

The PM also told the Forum Georgia had ranked seventh among 190 countries in the World Bank’s 2020 Doing Business ranking, and had been the highest-ranked country on budget transparency in Open Budget Survey 2021 published by the International Budget Partnership last year.  

He added Georgia had ranked 15th among 165 in the 2022 Economic Freedom Annual Report by the Fraser Institute, while the Heritage Foundation's Economic Freedom Index 2023 ranked his country 21st in Europe and “ahead of 11 EU member states”. 

Garibashvili also said Georgia’s ranking in the European Research Centre for Anti Corruption and State-Building’s latest Transparency in the Time of War index had jumped from 54th to 17th.