The Parliament heard the First Vice Prime Minister, the Minister of Economics and Sustainable Development, Levan Davitashvili within the Ministerial Hour. The Minister overviewed the economic development progress, made decisions and ongoing and scheduled projects and reforms.

According to him, high economic growth was maintained in 2023 and the index constituted 7.5%, and overall, average economic growth during the post-pandemic period of 2021-2023 achieved 9.7%. As he noted, 2024 started with positive tendencies of economic growth, namely, the average economic growth in January-February equaled to 7.7%, even achieving 9.5% in February.

“GDP per capita in USD increased to 8,210 USD in 2023. According to our forecasts, this index shall exceed 8500 USD in 2024, which in GEL will constitute 23 000”, - said the Minister.

The report provides that the export of goods in 2023 increased by 9,1%, constituting the record-breaking index – 6.1 bl. USD. Annual tourism profits increased by 17,3% (608,7 ml USD) and achieved the top point – 4.1 bl. USD, which means that the index exceeded the 2019 data by 26,2%. The direct foreign investments are also maintained on a solid level and Georgia is one of the first countries in the European and regional rating in terms of GDP; the direct foreign investments constituted 5 bl. USD for the last three years.

As the reporter noted, the role of the middle corridor has been intensified and the capacity of internationally transported cargo increased by 11% over the last 3 years; at that, the electricity generation, transit and export achieved an unprecedented point.

As reflected in the report, the high economic growth for the last 3 years allowed the rapid and effective fiscal consolidation. The budget deficit for 2023 was reduced to 2.5% of GDP (below 3% under the fiscal norm), and the state dept reduced to 39,3% of GDP. As for the inflation level, it is maintained below the target index as of April 2023, and the average level constituted 2.5%; and the inflation level for the last 9 months dropped below 1%.

“Unemployment is yet another significant issue – it was reduced to a historical minimum in 2023, while the employment level was drastically increased. The number of employees in 2023 increased by 51,000 in 2023 and constituted 335,000. It is noteworthy that the number of the contracted employees increased by 50,000, which is truly productive. At that, the unemployment level in 2023 was reduced by 0.9%, lowering to 16.4%”.

Per the assessments of the Minister, the positive tendencies were backed by reasonable macroeconomic policy, the durability of reforms and the improved competitiveness of the private sector.

“The unemployment index in 2023 was reduced to a historical minimum, however, unemployment and poverty still remain the acute challenges. Hence, the key objective of the economic policy envisages the facilitation of employment, which takes complex activities implying the improvement of competitiveness of the private sector, structural reforms, extension of the export potential and higher quality of trade. We aspire to attach utmost attention to the economic capacities and the accessibility to the basic services”, - noted Davitashvili.

As he stated, despite the economic growth, the private sector, competitive local production and export are set as the priorities along with the attractive investment milieu and the facilitation of domestic and foreign investments.

According to the Minister, the development of the investment funds constitutes one of the strategic directions through the partnership with the World Bank, namely, the Agency “Produce in Georgia” is keeping the establishment of the private capital funds with the limited partnership of the state. 2-3 funds are to be supported for 3 upcoming years, the total capacity of which will constitute 80 ml USD.

The Government also intends to further support traditional business projects, innovations and technologies etc.

As the reporter added, a new Draft Law is to be soon submitted to the Parliament determining new statuses for the Georgian companies, including the supportive mechanisms: innovative start-ups, innovative small and medium enterprises, as well as the exclusive research and development (R&D) company. According to him, deriving from the EU candidate status, the legislative and institutional approximation with the EU beyond DCFTA commitments is getting intensified.

“In this view, we, in collaboration with the European Commission, developed the Georgia-EU DCFTA priority action plan for 2024-2025 (PAP), which will be adopted within the year. The plan aims at the formation of the mutually communicated activities, including beyond DCFTA”, - he stated.

Pursuant to the Rules of Procedure, the Minister is answering the questions after the report.