The Heritage Foundation’s 2019 Index of Economic Freedom indicates that Georgia has improved its position in the region by one place and is at the eighth position among 44 European countries while it is at the 16th position among 180 countries of the world with overall score of 75,9 points and the status of “Mostly Free”.
Georgia’s overall score is higher than the average score in the region (68,6 points) as well as in the world (60,8 points).
The Index evaluates the countries via four main indicators: Rule of Law, Government Size, Regulatory Efficiency and Open Markets. Each of the main components unites several components.
Georgia has improved its position in 5 out of 12 components including Property Rights (65,9 points), Government Spending (73,6 points), Tax Burden (87,1 points), Fiscal Health (93,9 points) and Financial Freedom (70 points).
Georgia is ahead of such countries as Luxembourg, Sweden, Finland, Lithuania, Czech Republic, Germany, Norway, Israel, Qatar, Korea, Japan, Latvia, Bulgaria, Poland, Armenia, Slovenia, Azerbaijan, Hungary, Slovakia, Turkey, France, Italy, Moldova, Russia, Belarus, Ukraine, etc.
The Heritage Foundation’s 2019 Index of Economic Freedom confirms that the Government of Georgia has taken important steps in the last few years: many reforms have been implemented in order to eradicate minor corruption in the country, reduce regulations and the country has moved on open market policy and developed the transport and energy infrastructures. Further reductions in regulation, tax burden and elimination of corruption will contribute to the inflow of the direct foreign investments in the country and stimulate sustainable economic growth. The 2019 Index provides a positive assessment of the country’s monetary stability, fiscal health and macroeconomic sustainability.
The Index emphasizes that the property rights in Georgia are highly recognized and strictly inviolable, the state has simplified the property registration procedures while the independent court is guaranteed by the country’s constitution and legislation. According to the Index, Georgia achieved significant progress in tackling minor corruption. The Index also positively evaluates the reduction of the size of the government, the simplification of the tax burden and provided fiscal freedom (the total tax burden equals to 25,8% of national income. The share of the state expenditure during the last three years amounts to 29,6% of the country’s GDP and the share of the budget deficit is equal to average 1,1% and the state debt share in the GDP is 44,9%).
The Index positively evaluates the effectiveness of the regulations in Georgia, namely, the Index find the liberal business environment to be the driving force of the economy. Starting a new business requires minimum of time and procedures. At the same time, it is not hard to find the relevant working force though the labor market and its dynamics is still a challenge to the country. The State increases the subsidies for the development of the green economy and transport projects in the country.
It is noteworthy that the Index of Economic Freedom is based on the international rankings such as Doing Business, Global Competitiveness Index (GCI), Corruption Perception Index (CPI) and the World Justice Index (WJP).