TBILISI, June 30 – Sputnik. The recovery of the Georgian economy continues – GDP growth in May amounted to 25.8% compared to the same period last year, according to the Sakstat National Statistics Service.
At the same time, the Georgian economy in the first quarter decreased by 4.5% compared to the same period last year.
Economic growth of Georgia in May and five months of 2021
In May 2020, the economic decline was 13.5%. The pace of economic decline in Georgia caused by the coronavirus pandemic has slowed down – in February 2021, compared to the same month last year, GDP decreased by 5.1%.
Average real growth rate for five months YTD is 11.5%
In May 2021, compared to the corresponding period of the previous year, there was an increase in almost all types of activities: manufacturing, financial and insurance activities, trade, real estate, hotels and restaurants, construction, transport and warehousing.
What has grown and how much
Export growth in January-May amounted to 24.4%, local exports increased by 27%, and imports – by 15.7%. In May, exports rose 45% and imports 40%.
Exports of copper ores, ferroalloys, as well as wine, nuts and mineral waters played an important role in the overall growth.
The increase in imports is mainly due to foreign trade in cars and petroleum products.
Last month, 3,581 new enterprises were registered in the country, which is 12.5% more than in the same period last year.
In addition, the number of registered businesses decreased by about 25% compared to the same period in 2019.
“The turnover of enterprises paying VAT increased by 50% and amounted to 8.2 billion lari,” said executive director of Sakstat Gogita Todradze at a briefing on Wednesday.
According to Todradze, the growth in the manufacturing sector was mainly associated with the metallurgical industry – the production of iron, steel and ferroalloys, as well as the chemical industry. For example, the production of mineral fertilizers has increased.
The export of ferrosilicomanganese increased by 46%, while the export of nitrogen fertilizers increased almost 3 times – by 171%. In addition, there was an upward trend in the production of food, beverages and clothing. Accordingly, in May 2021, the export of mineral water increased by 97%, and the export of wine – by about 2.5%.
As a result of the intensification of construction, the production of building materials increased. In particular, the volume of production of cement and building structures increased.
Growth in the construction sector is associated with the construction of both residential and non-residential buildings, as well as with an increase in the volume of specialized construction work: electrical, repair and installation.
Imports of building materials increased by almost 56%, while imports of cement, clinker – by 20%.
The reason for the growth of the financial sector is the increase in interest income of commercial banks, which is mainly associated with the volume of long-term loans issued to both individuals and legal entities. According to Todradze, the net profit of companies operating in the relevant sector increased by about 70%. The growth in the retail sector was mainly due to the expansion of trade in cars and their spare parts.
In addition, during the reporting period, the re-export of passenger cars increased by 87%. The retail trade in petroleum products, pharmaceuticals, building materials, certain categories of household appliances, and computers has grown significantly. At the same time, imports of petroleum products increased by about 81%.
The authorities are happy
Minister of Economy and Sustainable Development Natia Turnava positively assessed the process of economic recovery in Georgia, which began in March.
“In May, as expected, a very high economic growth was recorded, almost 26%. You know that since March there has been a process of economic recovery at such a rapid pace. For 2-3 months we have seen truly unprecedented double-digit growth,” Turnava said.
According to her, the authorities are satisfied with this pace, since the growth of indicators is observed in those sectors of the real productive economy, in which the majority of citizens are employed.
According to the Minister of Finance Lasha Khutsishvili, based on the economic activity recorded in May, the department will revise the annual forecasts of economic growth, which will already be reflected in the revised version of the draft budget. The document will be submitted to parliament for consideration in the near future.
“It is important that the dynamics of economic growth is moving towards a positive scenario, which shows the expectation that this year economic growth will be at a double-digit level,” Khutsishvili said.
Earlier, the Ministry of Finance revised its forecast for Georgia’s economic growth in 2021. Three growth scenarios are considered – a baseline 6.5%, an optimistic 10.2% and a pessimistic 4.3%. According to forecasts, GDP growth will be high in 2022 and will amount to 6.9%.