Georgia sees a 33% fall in Foreign Direct Investment in 2018 Q1

Foreign Direct Investment dropped 33 per cent in 2018 Q1 (preliminary data) to USD 279 million, National Statistics of Georgia reported Monday. 

The shrinkage is due, in part, to transferring of ownership from non-resident to resident units in some companies. It can also be traced to the decrease in debt liabilities to non-resident direct investors.

The Transport and Logistics and the Energy sector were noted as being particularly affected. These sectors are vital to Georgia’s development and should, in fact, be the most developing and growing industries. The shrinking investment underscores the Georgian Government not taking necessary steps to attract and surge an interest among investors.

The largest share of FDI was allocated in the Financial Sector (USD 110 million), followed by Construction (USD 69 million) and Manufacturing (USD 40 million). The largest share of FDI by major direct investor countries is distributed among United Kingdom (USD 82 million), Azerbaijan (USD 51 million) and China (USD 41 million).  

FDI is of great importance to a region, it encourages adaptation of new business models and systems, which is directly linked to an increase in productivity and competitiveness. It is particularly vital to the Georgian economy as it has relied heavily on global funding. A further research needs to be done in order to identify the implications behind a decreasing tendency in FDI and raise awareness among the Georgian Government to be actively involved in attracting investments. 

By Anna Zhvania