Georgian PM tells Parliament domestic economic growth “one of the highest in Europe”

Georgian Prime Minister Irakli Kobakhidze on Friday emphasised the “very high” economic growth of 9.3 percent of the first five months of the year, calling it “one of the highest in Europe” in comments to the country’s Parliament.

In his annual report to the lawmaking body, the Prime Minister also reaffirmed the Government’s commitment to peaceful restoration of the country’s territorial integrity and “complete eradication” of poverty. He stated “every Government step” moving forward would be geared towards achieving these national objectives.

The average economic growth from 2021 to 2023 was 9.7 percent. As for this year’s data, it is significantly higher than the International Monetary Fund’s initial prediction of 4.8 percent. [...] a 9.3 percent growth surpasses the IMF’s original forecast”, Kobakhidze said.

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The PM noted the “strong” economic growth had enabled the Government to maintain a “solid level” of fiscal consolidation.

Our country’s fiscal position remains robust across various metrics including foreign debt, budget deficit, current account deficit and inflation. Inflation was at 0.6 percent between January and April, which stands out as one of the best indicators in Europe”, he said.

Furthermore, the economic growth has allowed for a ₾360 million ($128.59mln) increase in this year's budget and the necessary adjustments will be presented to the Parliament”, the PM added.

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Kobakhidze also stressed the link between a “strong economy and a strong state”, underscoring economic development as the Government’s “primary priority”, while also emphasising the direct impact of economic growth on the standard of living.

He pointed out that poverty had decreased from 30 percent in 2012 to 11.8 percent in 2023, indicating an “essential but challenging task” to eliminate poverty entirely.

The Prime Minister also highlighted a record employment rate in Georgia, with 1.4 million people currently employed, marking the “highest level since the 1990s”.

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Kobakhidze spoke about infrastructural projects, among them the East-West Highway and railway modernisation projects. He said a total of 90 kilometres of highways would be built this year, calling the number “more than that achieved by the previous Government in nine years”.

There is such a big change between the efficiency of the previous and the new governments”, the PM said.

He emphasised the Government’s focus on developing the transit function of the country due to “new geopolitical opportunities” and added “special attention” would be given to the development of relevant infrastructure, particularly highways.

Over the past 4.5 months, significant progress has been made in opening new road sections. Specifically, 36 km of roads has been completed in Rikoti, 89 bridges have been constructed and 50 tunnels have been carved”, he told MPs.

In April, the Zestaponi bypass was opened, while the Batumi bypass construction is in its final phase, with all five tunnels already excavated and 20 bridges built. Additionally, the unique nine-kilometre Kobi-Kvesheti tunnel was completed and opened in April. Work is also underway to finish the remaining sections of the Khulo-Zarzma road and improvements are being made to all sections of the Baghdati-Abastumni road”, the PM added.

Kobakhidze noted his Government would present a new four-year plan for further development of highways in the fall.

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The Prime Minister also noted the modernisation project of the national railways had been “successfully implemented”.

All six tunnels included in the project have been completed. The project includes the construction of the longest railway tunnel connecting Kvishkheti-Zvare, which spans over eight kilometres in length. Additionally, 95 percent of the construction works for the Baku-Tbilisi-Kars project have been completed and railway shipments have been restored in test mode since May”, Kobakhidze said.

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He also emphasised the significance of the development of Anaklia port in the country’s west, saying the process of selecting a private partner for the port had been completed with a proposal submitted by a Chinese-Singaporean consortium.

An agreement is set to be signed in the near future, ensuring the state retains 51 percent of the shares while the consortium holds 49 percent. Additionally, a tender was held in line with World Bank rules, and construction works are expected to commence soon. The initial phase of investment is valued at $600 million, with the port projected to handle 600,000 containers, equivalent to approximately 7.8 million tonnes of cargo after completion”, the PM said.

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Kobakhidze also highlighted the growth in the export of agricultural food products, with a “record” $1.4 billion worth of products exported to 106 countries, reflecting a 15 percent increase from the previous year.

Notably, wine exports reached a record $259 million, the “highest figure in Georgia’s history”.

Additionally, he said the value added in agriculture had doubled since 2012, reaching ₾4.8 billion ($1.71bln). Investments in agriculture have also increased, with the state co-financing reaching ₾2 billion ($0.71bln) out of a ₾7.5 billion ($2.68bln) investment.