Page 1

Economic

Outlook and Indicators Newsletter, #5

www.pmcg-i.com

EEEEEForeign Direct Investment

MJuly,2013

mln.USD

400

9%

350

8%

300

7% 6%

250

5%

200

4%

150

3%

100

2%

50

1%

0

0% 2011 I

II

III

IV

2012 I

Foreign Direct Investment

II

III

IV

Foreign Direct Investment as a percent of GDP (%)

Quarterly dinamics of Foreign Direct Investment

Foreign Direct Investment (FDI) has positive impact on country’s economy. It contributes to the improvement of living standards through increased productivity and production. Since 2012, quarterly dynamics of FDI is decreasing. In 2012, the volume of FDI was significantly lower in comparison with the corresponding indicator in 2011 (-23%). In the first quarter of 2013, the volume of FDI increased (25%) in comparison with the corresponding indicator of the fourth quarter of 2012, but it was lower than the volume of FDI in the first quarter of 2012 (-16%). In the first quarter of 2013, the share of foreign direct investment in comparison with GDP of corresponding period was 6.5% , which is lower than the corresponding rate for the I quarter of 2012 (7.9%).

2013 I

7% 6%

20%

5%

0%

4% 3%

-20%

2% -40%

1%

Growth rate of real GDP (%)

Growth rate of FDIcompared to previious year (%)

8%

40%

9th place (out of 124) in the

64th place (out of 144 countries) in the Global Competitiveness Index of World Economic Forum, 2012-2013

9%

60%

21th place (out of 179 countries) in the ranking of Heritage Foundation’s Economic Freedom Index, 2013

ranking of World Bank’s Doing Business survey, 2013

Foreign Direct Investment as a percent of GDP

Foreign Direct Investment and real GDP growth rate 80%

Georgia in International Ratings

In the period of 2011-2013, the dynamics of growth rate of foreign direct investment follow the dynamics of GDP growth rate except in the first and second quarter of 2012, when GDP growth was positive (6.7%, 8.2%), while FDI growth slowed down (28.4 , -11.7%). It should be noted that since the second quarter of 2012 FDI growth is negative (-11, 7%). In the first quarter of 2013, the indicator of foreign direct investment is higher than the corresponding indicator of the fourth quarter of 2012 (31%), but remains lower than corresponding indicator of the first quarter of 2012 (-16%).

511h place ( out of 176 countries)in the ranking of Transparency International’s Corruption Perception Index, 2013

931h place (out of 142 countries) in the Legathum Prosperity Index 2012

BB-/Stable/B - Standart and Poors , 2012

0%

-60%

2011 I

II

III

IV

2012 I

Growth rate of Foreign Direct Investment

II

III

IV

2013 I

Growth rate of real GDP

Foreign Exchange Rate In the period of 2011-2012, the foreign trade balance was negative. In 2011, quarterly dynamics of the volume of foreign trade balance was increasing, as well as the quarterly dynamics of the volume of foreign direct investment. In 2011, FDI was covering 23% of trade balance. In 2012, quarterly dynamics of the volume of foreign trade balance continued to increase, except for the fourth quarter, while the volume of FDI decreased. In 2012, the volume of FDI was covering only 16% of trade balance. In the first quarter of 2013, the volume of trade balance decreased in comparison with the fourth quarter of 2012 as well as in comparison with the first quarter of 2013. In the first quarter of 2013 the volume of FDI was covering 22% of trade balance.

Foreign Direct Investment and Net export

01.01.13 1.6562

09.07.13 1.6553

EUR

2.1845

2.1276

Contact Information

2013 I IV III

PMC Research Center Tamar Jugheli

II 2012 I IV III II 2011 I -1600

USD

-1400

-1200

-1000

-800

-600

-400

-200

0

200

mln.USD Foreign Direct Investment

Net export

400

600

E-mail: tjugheli@pmcg.ge E-mail: pmcresearchcenter@ pmcg.ge T: (+995) 2 921171 www.pmcg-i.com


Economic

Outlook and Indicators www.pmcg-i.com

NNewsletter, #5

EEForeign Direct Investment

MJuly, 2013

Foreign Direct Investment by countries (2012)

Foreign Direct Investment by countries (I quarter.2013 ) Japan

20%

Azerbaijan

29%

The Netherlands

The Netherlands

41%

10%

The Unated Kingdom

17%

5% 6%

Germany

16%

Azerbaijan

China

10%

The Unated Kingdom

Chech Republic

8%

15%

Turkey

Other

7%

International organizations

8%

8%

Other

In 2012, five major investor countries in Georgia were Germany (16%), the Netherlands (10%), Turkey (10%), Azerbaijan (8%) and the UK (8%). In the first quarter of 2013 five major investor countries were: Japan (20%), Azerbaijan (17%), the Netherlands (15%), United Kingdom (8%) and China (6%). It should be noted that in the first quarter of 2013 the largest share of foreign direct investment inflowed from Japan (20%), while FDI from Japan during 2012 was only 1.6% of the total investment.

Foreign Direct Investments by Economic Sectors (2012)

Foreign Direct Investments by Economic Sectors (I quarter. 2013) Financial sector

Manufacturing

19%

29%

37%

Transports and communications

18% 5%

6%

Energy sector

4%

mining

5%

22%

Energy sector

Financial sector Transports and communications

17%

20% Consultancy

Manufacturing

Other sectors

18%

Other sectors

In the first quarter of 2013, the largest shares of FDI were allocated in the following five economic sectors: the financial sector (29%), energy (10%), mining and quarrying (5%), transport and communication (5%) and manufacturing (5%). In 2012, foreign direct investment focused on the following sectors: industry (22%), energy (20%), financial sector (17%), transport and communications (17%) and counseling (4%).

Basic Economic Indicators

2011

2012

I12*

II12*

III12*

IV12*

I 13*

Nominal GDP in current prices (mln USD)

14 438

15829.7*

3388.3

3918.3

4156.1

4367.6

3487.6

Per capita GDP (USD)

3 230.7

3519.6*

753.4

871.2

924.1

971.1

777.8

GDP real growth, percent

7.20%

6.1%*

6.70%

8.20%

7.50%

2.80%

2.40%

Consumer Price Index

8,5%

-0.9%*

Foreign Direct Investment (USD)

1 117

865.2*

269.4

219.4

195.4

181

226.2

15.10%

15%

-

-

-

Unemployment Rate External Public Debt (mln USD)

4200.5

4357.1

-

-

-

Poverty Level

9.20%

9.7%*

-

-

-

Source:

National Statistics Office of Georgia, Ministry of Finance of Georgia, National Bank of Georgia

-2-

*projected

Contact Information

PMC Research Center

Tamar Jugheli

E-mail: pmcresearchcenter@pmcg.ge E-mail: t.jugheli@pmcg.ge T: (+995) 2 921171 www.pmcg-i.com

Economic outlook and indicators, foreign direct investment  
Economic outlook and indicators, foreign direct investment  

economic review

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