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Did Investments in Ajara Grow or Decline?

According to the 2015 preliminary report, the foreign direct investments in the Ajara Region declined by 24%, while the Ministry of Economy and Finance of the Autonomous Republic of Ajara assures that the ratio of foreign investments in total private investments made up 53%.

PMC Research Center reports that the Geostat indicators reflect preliminary indicators that may increase or decline in the final report that will be published in August 2016.

Before we have the final report, there are two indicators that cannot be brought under question, because both indicators are based on competent and reliable sources. Therefore, the final word rests with the Geostat, the national statistics service of Georgia.

 PMC Research Center report suggests that FDI inflows to the Ajara Region have declined by 23.8%, according to the 2015 preliminary indicators.

Foreign investors find Ajara as the second most attractive region in Georgia, after Tbilisi.

PMC Research Center analysis shows that after Tbilisi the most attractive regions in Georgia for foreign investors are as follows: Ajara (9%), Kvemo Kartli (4.1%) and  Samegrelo-Zemo Svaneti and Guria (3.8%), including, as compared to the previous year, in 2015  investment inflows increased in Kvemo Kartli (+0.3%) and decreased in Ajara (-23.8%), Samegrelo-Zemo Svaneti and Guria (-45%).

Total FDI inflows to Tbilisi throughout 2015 have declined by 17.5% year on year. Nevertheless, the capital city’s ratio in the 2015 total FDI inflows to the country rose by 5.5% to 81%, because foreign direct investments dropped in larger amounts in regions.

The Ministry of Finance and Economy of Ajara: In 2015 foreign direct investments in the Region rose by 53.2%.

According to the Ajara Finance Ministry statistics, as compared to 2014, in 2015 private direct investments in Ajara rose by 33% to 366 million USD, including  87 million USD were of domestic origins and 279 million USD were foreign direct investments (FDI), while the 2014 FDI inflows marked only 182 million USD. This signifies the year on year growth made up 53.2%, according to the Ajara Finance and Economy Ministry.

Sectoral ratio in private foreign direct investments show that major investments are made in the power sector (53%), tourism sector (39%) and the development sector (7%), according to the Ajara Finance Ministry report.

Hence, major investments were made in the Ajara energy sector throughout 2015 and the sector’s ratio in total FDI inflows marked 41%. The tourism sector emerges as the second attractive field with 33% ratio, the development sector accounts for 23%, the agriculture – 1%, industry – 1% and all other sectors of the economy – 1%. The volume of investments in relation to nominal total surplus value makes up about 15-25%.

The volumes of investments in relation to total surplus value created in the region and its calculation per capita are also considered as significant variables for estimating investment activities. The volume of investments in relation to nominal total surplus value makes up 15-25%, while the amount of private direct investments per capita in the region made up 1 087 USD in 2015.

Energy, industry and tourism sectors are the fastest growing directions in the Ajara Region.

Based on the statistical information, the energy, tourism and industry sectors emerge as the fastest growing fields, the Ajara Finance Ministry says. As reported, according to the 2015 preliminary indicators, FDI inflows marked 1 351 million USD, down 407.4 million USD compared to the 2014 final report.

The reporting period has recorded the following major investor countries: Azerbaijan (40.1%), the United Kingdom (14.1%) and the Netherlands (8.2%). The ratio of the transportation and communications sector in total FDI accounts for 44% and Tbilisi remains the most attractive region in Georgi for investors (81% ratio in total FDI).