Georgia to achieve “highest” economic growth in wider region, Europe - Minister of Economy candidate

Levan Davitashvili, the ruling Georgia Dream’s candidate for the Minister of Economy of Georgia, on Wednesday said the country would experience the “highest economic growth” among nations in the wider region and Europe this year and into the medium term.

Speaking at a joint committee meeting at the Parliament of Georgia, Davitashvili highlighted “consistent positive trends prevailing” in the country’s economy over the past few years, and attributed the growth to the Government’s “well-thought-out, coherent, correct and effective vision and policy”.

Citing estimates from the International Monetary Fund, he also emphasised Georgia was poised for “remarkable economic advancement”.

According to January-September data, our economy has grown by 9.9 percent. It is particularly noteworthy that, alongside this high growth over the past two years, Georgia has maintained a low inflation rate. In 2023, inflation was recorded at 2.5 percent, and by October, it had dropped to just 0.3 percent”, the ministerial candidate said.

This robust economic growth has had a positive impact on the socio-economic conditions of our population. The unemployment rate has continued to decline, averaging 13.8 percent in the first three quarters of 2024”, Davitashvili continued.

Concerning poverty, the percentage of individuals living below the absolute poverty line fell to a historic low of 11.8 percent last year, with more than 350,000 people lifted out of poverty in just three years. However, despite these positive developments, we must acknowledge that poverty remains a significant challenge”, he added.

Looking ahead, Davitashvili projected robust economic growth, with expectations for the gross domestic product to exceed ₾130 billion ($47.62bln) by 2028 and GDP per capita to rise above ₾35,000 ($13,000).

The high economic growth will enable us to gradually close the gap between the living standards of Georgia and those of developed countries”, he said.

Davitashvili emphasised that along with sustained economic activity and structural improvements, more than 200,000 additional jobs were anticipated to be created. He added the poverty rate could fall to four percent by 2028, helping to uplift an additional 290,000 people out of poverty.

The official further noted the country boasted “one of the most liberal foreign trade policies in the world”, characterised by a simplified trade regime and customs procedures, and low import tariffs.

In 2023, exports of goods increased by 60 percent compared to 2019, and trade turnover rose by 63 percent”, he said.

Davitashvili praised the Ministry's achievements in foreign economic relations over the past years, noting Georgia had signed free trade agreements with both the European Union and China.

He emphasised the Government was continuing its work to diversify the country’s export markets, which he said would enhance the availability of domestic products in international markets and boost the nation’s economic potential.

He said negotiations for a free trade agreement with South Korea were set to be completed, with the agreement  expected to be signed in 2025, adding negotiations were also in progress with India, Israel, Gulf states, Serbia, and other countries.

The ministerial candidate also emphasised the significance of tourism for the nation’s economy, adding strengthening the sector was a “key priority” for the Government. He said tourism revenues had reached a “record” $4.1 billion in 2023, adding he anticipated this figure would rise to $4.4 billion this year.

He also highlighted the potential for developing the country’s resorts, noting over 200 resorts and resort areas had been studied for their development potential. More than 60 tourist attractions, distinguished by their natural resources, have been selected for future resort development based on technical and economic feasibility studies, he noted.

Looking ahead, he emphasised the importance of promoting Georgia’s mountain resorts to attract more domestic and foreign tourists. Plans include construction of new cable cars, establishment of new ski trails, and qualitative improvements to mountain skiing infrastructure.

Davitashvili discussed the promotion of the hotel sector and upcoming campaigns, aimed at enhancing the tourism industry. Over 300 new accommodation facilities, providing more than 34,700 beds, will be added to the Georgian hotel market, with private investments in this sector projected to reach approximately ₾1 billion ($366mln), he said.

As a result of the Government's initiatives, by 2028, tourism income is expected to reach $6.4 billion, and the number of international traveller visits will increase to 11 million”, Davitashvili said.
 
The ministerial candidate noted about 670 flights per week were operated by 105 airlines during the first 10 months of 2024, adding this year had seen “record” figures for new incoming airlines and routes.

After several years of absence, both Austrian Airlines and British Airways have returned to the market. Alongside the increase in passenger traffic, the development of Georgian airports is also progressing”, he said.

According to the ministerial candidate, plans are underway to construct a new international airport in the capital city of Tbilisi on the site of the former military airfield in Vaziani, with a capacity to accommodate aircraft of “any size”, thereby positioning Georgia as a “regional hub”.

Davitashvili explained the new airport would enable a gradual increase in the capacity of the existing Tbilisi airport from five million to 20 million passengers per year.

He also highlighted improvements planned for western Kutaisi International Airport, which he said would see its capacity increased from 1.7 million to five million passengers.