Issue 5, 2018. October-November


Investment News provides a brief update on investments and changes in government policy that could impact the business environment. The information in this issue was taken from, a government- supported website, and other sources.

IMF Praises Georgian Economy
Managing Director of the International Monetary Fund Christine Lagarde said the Georgian economy is showing "strong signs of recovery."
She made the statement following her meeting with Georgian Prime Minister Mamuka Bakhtadze in Washington, D.C. on September 21.
"Prime Minister Bakhtadze and I discussed the good progress under Georgia's economic reform program supported by the IMF's $285 million Extended Fund Facility. We also discussed the importance of advancing Georgia's ambitious reform agenda to support investment, education, and competitiveness, with the ultimate goal of achieving sustainable and inclusive growth, which will benefit all Georgians," Lagarde said, adding that she has reiterated the IMF's commitment to support Georgia and its people.

Georgian PM Raises Free Trade Deal with Pompeo
Georigan Prime Minister Mamuka Bakhtadze met U.S. Secretary of State Mike Pompeo at the U.S. Department of State in Washington D.C. on September 20. Praising Pompeo as a "faithful friend of Georgia," Bakhtadze told journalists after the meeting that the two officials discussed the possibility of a free trade agreement between Georgia and the U.S.
"We are supported by our U.S. allies in this very important endeavor," Bakhtadze told journalists.

Georgian GDP Up 5.5 Percent in Q2
The real growth rate of Georgia's GDP was 5.5 percent in the second quarter of 2018, compared to last year, according to Geostat, the official statistics body of Georgia. In Q2 of 2018, estimated real GDP growth was registered in several areas, including real estate (13.8 percent growth); social and personal services (17.9 percent growth); financial intermediation (22 percent growth); and manufacturing (8.5 percent growth).

Number of Airport Passengers Up 25 Percent
Georgian airports served 25 percent more passengers in the first eight months of 2018 than during the same period last year, according to the United Airports of Georgia. In total, the country's airports served 3,375,959 passengers during the first eight months of this year. The biggest airport is Tbilisi International Airport, which had a 12 percent increase in August compared to the same period last year (461,051 passengers). Passenger traffic is also up at Kutaisi International Airport, increasing 44 percent compared to August of last year.

Government Drafts New Customs Code
The government has presented a new customs code that brings Georgian legislation closer to European standards.
"The new customs code will become an important stimulus for attracting European investments and will support the integration process of Georgian businesses on the European market," Prime Minister Mamuka Bakhtadze said. Once the new code is implemented, Georgia will be the "first country in the region with both European customs infrastructure and legislation, which will contribute to the development of international trade," the Prime Minister added.

Japan to Finance 14 km of East-West Highway
Georgia and Japan have signed an agreement worth $343 million to build the 14 km stretch of the East-West Highway that stretches from Shorapani to Argveti. Japanese technology will be used during the second phase of the project, reported. The project is planned to be finalized in the first quarter of 2023.

Georgia's Top Banker Recognized
National Bank of Georgia Head Koba Gvenetadze has been named one of the top central bankers of 2018 by Global Finance magazine. This is the first time the head of the National Bank of Georgia has been included in the list, reported. Global Finance has published its annual Central Banker Report Cards since 1994 and grades central bank directors in 85 countries.

European Investment Bank Lends Millions for SME Development
The European Investment Bank has lent €30 million to TBC Bank as part of its efforts to increase financing for small and medium businesses, reported on September 28.
Since 2011, TBC Bank has on-lent €85 million to small and medium businesses via the European Investment Bank program.
The funds will be provided within the European Union's EU4Business initiative, designed to support SMEs in the six Eastern Partnership countries - Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine, the report said.

Georgian Budget Predicts 4.5 Percent Growth
The Georgian government has predicted that the economy will grow 4.5 percent in 2019, according to the draft budget, reported on October 1.
The International Monetary Fund has projected that the Georgian economy to grow 5.5 percent this year and 4.8 percent next year.
The Asian Development Bank has recently raised Georgia's 2018 growth forecast to 4.9 percent, up from its earlier estimate of 4.5 percent, the report said.

Georgia Plans Grape Seed Oil, Flour Exports
Georgia is in negotiations to export oil and flour made from grape seeds, reported on September 24, citing information provided by the Georgian Ministry of Environmental Protection and Agriculture.
A new grape seed processing plant opened in Georgia's Kakheti region on September 24.
The plant was financed by Ukrainian EcoGeorgian Group, which invested one million lari in the project.