According to preliminary data of Statistics Service, in November exports from Georgia decreased by 35% and amounted to USD 203 million, imports decreased by 7% and amounted to USD 725 million, which means that Georgia has the negative trade balance. Georgia buys goods worth more than it sells. A decline in exports began in August, while imports increased in September-October.
In January-November 2014, the foreign trade turnover of Georgia amounted to USD 10, 4 billion, which is 7% more than in the same period of 2013. Export accounts for USD 2.6 billion, which is 7% higher than last year, imports – 7.7 billion that is 9% higher. During this period, the negative balance amounted to USD 5.1 billion and made 49% of trade turnover.
Details of the November data will be released on December 24, but it is already clear that a decline in exports is mainly due to the deteriorating economic situation in Russia and Ukraine, as well as a 40% decline in re-exports of cars to Azerbaijan in comparison with 2013 – in April imports of cars manufactured before 2005 was banned in the country.
The largest trading goods are export and re-export of cars, which volume in October was less than the previous year, compared to 113 million. The reasons for this are regulations about for the vehicles produced in Azerbaijan in until 2006.
Economic Analyst, Chairman of Georgian Infrastructure Projects Initiative
Geostat’s report on Georgia’s January to November exports-imports indicators gives a reason for contemplation.
In January-November 2014, Georgia’s foreign trade turnover amounted to 10.4 billion USD, up 7% year on year. Exports marked 2.6 billion USD, up 0.5%; imports constituted 7.7 billion USD, up 9%. The negative trade balance amounted to 5.1 billion USD, up 12.7% year on year.
Year on year growth in trade turnover marked 7%, but a high pace (about 13%) of growth in negative trade balance is an alarming sign. At the same time, considerable difference is recorded between exports and imports growth indicators. For example, exports growth is 18 times lower compared to the imports growth indicator.
The current situation is mostly preconditioned by the Russian economic crisis. Amid catastrophic depreciation of Ruble, Russia is facing absolute transformation of consumer conduct norms and rules. All these changes will make significant negative affect on Georgia’s business sector in medium-term and long-term perspectives/. Today Georgian exports are bearing certain losses on the Russian market.
Exports-Imports negative balance growth tendency poses threats and risks to GEL. Currently, sharp misbalance is registered in Georgia between demands for GEL and USD and the demand for USD is reported to be growing, while the GEL value keeps declining.
Hence, Georgia will have to draw as much foreign direct investments (FDI) as possible to ensure and protect monetary balance as one of the main challenges in 2015.
Executive Secretary of the United National Movement, Member of Parliament
Executive Secretary of the United National Movement, Zurab Japaridze held a press conference on the problems of foreign trade. Japaridze said the decline in exports over the past months was the first. He focuses on the Export Market.
Japaridze says the country’s export growth in Russia is risky. Export of goods to Russia in 2013 increased by 209% in 9 month, and in 9 month of 2014 increased by 103%. Export growth in other countries is only 1%. This means that the Georgian economic is depending on the Russia.
According to the executive secretary of UNM, Georgian government is no more trying to diversify of export potential. He considers that Georgia is still dependent on the major trading partner – one Russian Federation and this is a threat to its national security. Zurab Japaridze said the government was working badly extra funds from the new export markets.