Investment News

Investor.ge provides a brief update on investments and changes in government policy that could impact the business environment. Information in this issue was taken from agenda.ge and other sources.

Central bank keeps refinancing rate at eight percent
The National Bank of Georgia (NBG) on October 23 announced that it was maintaining the refinancing rate at eight percent, reflecting the country’s ongoing “low inflation” environment.
Since the beginning of 2023, inflation rates have remained “consistently below the target” of three percent, the bank said, adding that headline inflation was just 0.6 percent in September, with core inflation slightly higher at 0.8 percent.
Domestic inflation, which closely mirrors these expectations, has also remained under the three percent target, it added, saying increased competition within the economy had led to reduced profit margins for firms, further contributing to the low inflation rates. The central bank said these factors collectively had neutralized potential inflationary pressures stemming from strong demand. Looking ahead, the NBG projects inflation to hover around 1.2 percent this year, stabilizing near the three percent target in the medium term.
Despite positive indicators, the bank cautioned that “heightened uncertainty,” both domestically and internationally, remained a concern. “Ongoing hostilities in Ukraine and escalating geopolitical tensions in the Middle East could lead to a rise in regional risk premiums, potentially exerting price pressures. Additionally, the fluctuating costs of international oil and food, along with developments in the Red Sea region, may increase shipping expenses and risks associated with imported goods,” the central bank said.
The next meeting of the Monetary Policy Committee is scheduled for December 18.

Georgian external trade up 3.7 percent in January-September
Georgian external trade turnover amounted to $16.8 billion between January-September, posting a 3.7 percent year-on-year increase, the National Statistics Office said on October 21. The list of the country’s trading partners was topped by Turkey with $2.3 billion, Russia with $1.8 billion, and the United States with $1.5 billion.
The value of exports increased by 4.1 percent and equaled $4.8 billion, while imports also increased by 3.6 percent, amounting to $12 billion in the reporting period. The top export destinations were Kyrgyzstan ($908 million), Kazakhstan ($634.9 million) and Azerbaijan ($544.3 million). Motor vehicles dominated the list of top export items, reaching a value of $1.8 billion and accounting for 36.8 percent of total exports, followed by ferro-alloys with a total export value of $227.1 million, constituting 4.7 percent, and grape wines, totaling $214.5 million and making up 4.5 percent of the total exports.
Top imports were motor vehicles ($2.3 billion, accounting for 19.5 percent of total imports), petroleum and petroleum oils ($982.4 million, representing 8.2 percent of imports) and medical drugs ($462.8 million, representing 3.9 percent of imports).

Georgia’s Pension Agency invests ₾150 million in EBRD bonds
The Pension Agency of Georgia on November 6 announced an inaugural investment of ₾150 million ($55 million) in a five-year lari-denominated Floating Rate Note under the European Bank for Reconstruction and Development’s (EBRD) Global Medium Term Note program. In a statement, the agency noted that it saw the AAA-rated transaction as an important step in “enhancing the quality of its portfolio” that marked the beginning of a long-term partnership with the EBRD.
“The investment in EBRD bonds reflects our commitment to high-quality investments that strengthen the Pension Assets’ stability. This collaboration also opens doors for future opportunities that will support the development of Georgia’s capital markets,” Chief Investment Officer of the Agency Goga Melikidze said.
The EBRD’s Associate Director of Treasury Aziz Jurayev added that the “milestone transaction” for the agency was a continuation of the bank’s efforts to reduce reliance on foreign currency borrowing in the countries where it operates and to encourage borrowers to raise finances in local currency.

New flights launch to Tbilisi
Greek airline Sky Express has started operating direct regular flights linking Athens and Tbilisi, the United Airports of Georgia announced on November 14. The airline will offer flights three times a week between the two capitals. Sky Express is the third airline to offer direct regular flights between Georgia and Greece following Aegean Airlines, Greece’s largest airline company, and Hungarian budget airline Wizz Air.
Edelweiss Air, a subsidiary of Swiss International Air Lines and a member of the Lufthansa Group, will start direct flights from Zurich to Tbilisi starting in April 2025, the United Airports of Georgia announced on October 30. The new route, which will operate twice per week using Airbus A320 aircraft, will mark the first time a direct flight from Tbilisi to Zurich has been offered commercially. Transavia France, a French budget airline, is also set to start regular flights in April 2025, offering two services per week between Paris and Tbilisi.

Georgian PM announces $700 million oil refinery project on Black Sea coast
Georgian Prime Minister Irakli Kobakhidze on October 22 unveiled the Kulevi oil refinery project on the Black Sea coast of the country, calling it the “largest private investment initiative in the history of independent Georgia,” with an expected investment totaling $700 million.
Kobakhidze announced that the Tbilisi-based company Black Sea Petroleum would construct the country’s first oil refinery, with the initial phase of construction estimated at $110 million. He said the refinery aimed to produce “high-quality” petroleum products that meet international standards with “cutting-edge technology” and “modern equipment.”
“Once operational in March next year, the Kulevi oil refinery is anticipated to process 1.2 million tons of crude oil annually, with plans to gradually scale up production to four million tons. By the end of 2028, the facility will fully implement advanced processing capabilities for crude oil and petroleum products,” Kobakhidze added.
Kobakhidze also highlighted what he says will be a “significant positive impact” on the country’s economic growth. “The country’s export potential will increase substantially, improving the foreign trade balance. This, in turn, will contribute to the sustainability and stability of the national currency and promote the overall stable development of our economy,” he said. “The refinery will create high-paying jobs that meet international standards, employing 500 people in the first phase. It is crucial that the majority of these jobs will go to local residents,” he added.

Share of persons receiving monthly salary over GEL 2,400 up 5.4 percent YoY
The number of persons receiving a monthly salary increased by 2.6 percent compared to the corresponding period of 2023 and by 6.7 percent compared to the corresponding period of 2022, says PMC Research’s latest Employment Tracker Report released in October.
According to the report, in September 2024, the share of persons receiving a monthly salary up to 600 GEL amounted to 15.5 percent, which was 3.1 percent less than the corresponding period of 2023 and 7.4 percent lower than the corresponding period of 2022. The share of persons receiving a monthly salary of 2,400 GEL or more amounted to 28 percent, which was 5.4 percent more than the corresponding period of 2023 and 9.7 percent higher than in 2022. Furthermore, the share of persons receiving a monthly salary of 9,600 GEL or more amounted to 2.3 percent, which was 0.4 percent more than the corresponding period of 2023 and 0.7 percent higher compared to 2022.

Tourism revenue hits “record-high” in 9M of 2024
The Georgian National Tourism Administration on November 1 said revenues from international tourism had increased “significantly” between January and September and reached a “historic peak” of $3.5 billion.
“This marks a 6.5 percent increase compared to 2023 and surpasses pre-pandemic earnings by an astounding 34 percent,” the agency’s head Maia Omiadze said, noting that revenues from European Union countries and the United Kingdom, Israel, and Saudi Arabia had “significantly increased.”
Revenues from Israel hit a “record” $323 million, reflecting an increase of 24.9 percent over the previous year. Meanwhile, revenues from Saudi Arabia also hit a “historic high” of $108 million, up 21.7 percent compared to 2023. From the EU and the UK, revenues totaled $456 million, up by 6.7 percent YoY, the administration said.
“We are continuing our marketing campaigns in target markets. This year, we have launched campaigns in the UK, the EU, Israel, and the Persian Gulf countries. Next year, we are beginning active campaigns in new tourist markets, including India and China, alongside our continued focus on the UK. With the introduction of direct flights between the UK and Georgia, we anticipate an even stronger promotional effort,” Omiadze said.