According to a preliminary report by Geostat, the national statistics service of Georgia, Georgia’s foreign trade turnover in January to April 2016 marked 3.3 billion USD, up 8% compared to the same period of 2015 (+300 million USD).
The structure of trade partner countries has also changed. Despite low indicators in the previous years, imports from Canada has risen by about 40 times, from 11.6 million USD to 422 million USD (at the expense of imports of medications of 420 million USD); At the same time, Canada, according to the January to April indicators, emerged as Georgia’s number two trade partner country (450 million USD), while Turkey ranks first with 474 million USD. The top ten major trade partner countries also include: Russia, Ireland, China, Azerbaijan, Germany, Ukraine, Armenia and Italy.
It should be also noted, as compared to the January to April period 2016 (specified figures – 689 million USD) (according to preliminary estimations – 608 million USD), Georgia’s exports potential decreased (by 12%).
The main exports item, like the previous years, is copper ores and concentrates (113 million), motorcars come second with 48 million USD,
Filbert and other nuts rank third with 45 million USD. Exports of natural wines and mineral waters made up 55 million USD.
It should be also noted the Georgian exports is declining because of increased value of imports as a result of certain destabilization in trade partner countries (Turkey, Russia, Armenia, Azerbaijan, Ukraine and so on) and the national currency depreciation.
The structure of export goods, as well as their sales market, is changing. Along with reduction of the CIS countries ratio, the demand for Georgian products has increased on the EU market.
Despite contraction in total exports, the improved indicators of net exports should be also stressed. In whole, products of Georgian origin makes up ¾ of total exports and this is very important to achieve the positive balance. In other equal conditions, the high ratio of re-exports is the result of the increased imports.
As to the imports, as compared to January to April 2015 (by specified indicators – 2.35 billion USD), in January to April 2016 (according to preliminary indicators – 2.68 billion USD), Georgia’s exports potential increased (by 14%).
The main exports products are: medications – 722 million USD (eightfold upturn compared to January to April 2015); motorcars – 136 million USD (down 37%); oil and oil products – 135 million USD (down 36%). It should be also noted that Georgia imports copper ores and concentrates (92 million USD) and imports copper ores (113 million USD).
Imports indicators increased in January to April 2016 – 977 million USD indicator, that is an about doubled figure compared to the same period of 2015 (551 million USD in April 2015). This is tightly interconnected with the national currency strengthening in April 2016, as well as intensification of economic activity, including growth in tourism inflows that is directly related to upturn in consumption of imported products.
In January-April 2016, Georgia’s foreign trade turnover with the EU countries exceeded 900 million USD, up 11% compared to the same period of 2015 (exports of 147 million USD and imports of 789 million USD). Georgia’s foreign trade turnover with the CIS countries in January-April 2016 marked 765 million USD (exports of 184 million USD and imports of 581 million USD), down 15% compared to the same period of 2015.
These indicators prove that Georgia’s foreign trade turnover with the CIS countries is declining, while the turnover with the EU is growing.
Regretfully, Georgia’s foreign trade turnover in January to April 2016 recorded negative balance traditionally and this figure in absolute indicators make up 2.07 billion USD, 63% of the foreign trade turnover.
Consequently, domestic production, its exports and replacement of imports by domestic products remains a relevant issue again.
Fortunately, despite modest indicators in January to April 2016, the country records the best regional economic growth forecast of 3.6%. Both domestic and foreign competent organizations and field specialists stress that the country has very optimistic perspectives. Intensified trade-economic-political relations with the EU additionally enhance these perspectives and open new opportunities for Georgia in terms of new markets and long-term stability and sustainable development.
Vakhtang Charaia, TSU Analysis and Prognosis Center