The International Chamber of Commerce in Georgia (ICC Georgia) published the Foreign Economic Dependence Index. According to the document, Georgia's total Foreign Economic Index saw a slight decrease from approximately 9,463,007 in Q3 2024 to 7,617,008 in Q4 2024. This decline was primarily driven by a notable decrease in Income from Tourism and a shift in Foreign Investments from positive in Q3 to negative in Q4 for the "Others" category, alongside a general decrease in Exports.
Unfortunately, Russia remains a significant trading partner for Georgia.
Russia
• Imports: Increased (From 1,744,641 to 1,849,470), maintaining Russia's role as a key import partner, potentially due to established trade relationships and energy supplies. • Exports: Increased slightly (From 657,045 to 681,453), showing some resilience in Georgian exports to the Russian market despite geopolitical tensions.
• Money Flow: Decreased significantly (From 1,528,244 to 517,606), likely influenced by inter national sanctions and reduced financial transactions.
• Income from Tourism: Decreased significantly (From 1,163,558 to 854,068), a likely conse quence of geopolitical factors and travel restrictions.
• Foreign Investment: Decreased significantly (From 87,413 to 22,704) reflecting increased risk perception and reduced investor confidence.
• Total Foreign Economic Index: Decreased significantly (From 5,180,901 to 3,925,301), indicat ing a substantial weakening of the overall economic relationship, largely driven by declines in money flow, tourism, and investment, despite continued trade.
European Union (EU):
• Imports: Increased significantly (From 3,809,558 to 4,551,992), suggesting a growing reliance on EU goods, potentially due to factors like quality, availability, or trade agree ments. This rise could also indicate increased domestic demand being met by EU suppli ers.
• Exports: Decreased (From 704,427 to 573,512), which might signal reduced demand for Georgian goods within the EU market, increased competition, or shifts in Georgia's export focus towards other regions. Further investigation into the specific goods affected would be beneficial.
• Money Flow: Increased (From 1,290,490 to 1,392,055), indicating stronger financial linkag es, possibly through increased financial aid, or business transactions.
• Income from Tourism: Decreased slightly (From 339,502 to 330,217), which could be due to various factors like changing travel preferences of EU citizens or broader economic condi tions affecting travel.
• Foreign Investment: Decreased (From 491,928 to 307,773), which might raise concerns about the attractiveness of Georgia for EU investors. Analyzing the sectors where invest ment declined could provide valuable context.
• Total Foreign Economic Index: Increased (From 6,635,907 to 7,155,549), maintaining the EU's significant economic partnership, although the internal dynamics show a shift towards imports.
Azerbaijan:
• Imports: Decreased (From 655,957 to 583,168), potentially due to increased domestic production in Georgia or a shift in sourcing goods from other countries.
• Exports: Decreased (From 862,070 to 724,549), which could indicate reduced demand for Georgian products in Azerbaijan or increased competition in that market. • Money Flow: Decreased significantly (From 52,517 to 16,163), suggesting weakening finan cial ties, possibly due to changes in remittances or cross-border financial activities. • Income from Tourism: Decreased (From 112,100 to 54,578), which might reflect changes in travel patterns or economic conditions affecting Azerbaijani tourists visiting Georgia. • Foreign Investment: Increased (From 53,406 to 70,713) which is a positive sign and could indicate growing investor confidence from Azerbaijan in specific sectors of the Georgian economy.
• Total Foreign Economic Index: Decreased (From 1,736,050 to 1,449,171), indicating a weak ening of the overall economic relationship between the two countries.
Armenia:
• Imports: Decreased (From 335,733 to 236,582), similar to Azerbaijan, possibly due to domestic production changes or shifts in import sources.
• Exports: Decreased significantly (From 786,887 to 617,216), suggesting a notable drop in demand for Georgian goods in Armenia or increased competition.
• Money Flow: Decreased (From 18,611 to 7,660), indicating weaker financial links, potentially related to remittances or other financial transfers.
• Income from Tourism: Decreased significantly (From 431,874 to 276,408), suggesting a substantial decline in the number of Armenian tourists or their spending in Georgia, possi bly influenced by regional economic factors.
• Foreign Investment: Increased slightly (From 17,826 to 22,267), a minor positive development but perhaps not enough to offset the overall decline.
• Total Foreign Economic Index: Decreased significantly (From 1,590,931 to 1,160,132), pointing to a considerable weakening of the economic relationship between Georgia and Armenia.
China:
• Imports: Increased significantly (From 1,328,057 to 1,611,983), reinforcing China's position as a key supplier to Georgia, likely driven by competitive pricing and a wide range of avail able goods.
• Exports: Remained relatively stable (From 310,873 to 303,128), suggesting a consistent, though not growing, demand for Georgian products in the Chinese market. • Money Flow: Shifted to a net outflow (From 18,611 to -536), which could be due to increased payments for imports or changes in financial transfers.
• Foreign Investment: Decreased slightly (From 47,600 to 29,044), which might warrant moni toring to ensure it doesn't become a longer-term trend.
• Total Foreign Economic Index: Increased slightly (From 1,702,082 to 1,943,619), primarily driven by the surge in imports, highlighting an increasingly import-dependent relationship.
Iran:
• Imports: Increased (From 241,076 to 285,053), suggesting a growing need for Iranian goods in the Georgian market.
• Exports: Increased (From 30,133 to 36,940), indicating a slightly stronger demand for Geor gian products in Iran.
• Money Flow: Decreased significantly (From 231 to 8), suggesting a weakening of financial transactions between the two countries.
• Foreign Investment: Decreased slightly (From 933 to 623), suggesting a cautious approach from Iranian investors.
• Total Foreign Economic Index: Increased modestly (From 317,573 to 322,625), with the growth in trade slightly outweighing the declines in other areas
Israel:
• Imports: Increased (From 16,202 to 22,345), indicating a greater demand for Israeli goods. • Exports: Increased significantly (From 20,655 to 37,043), suggesting a growing market for Georgian products in Israel.
• Money Flow: Increased significantly (From 214,901 to 245,399), indicating stronger financial ties, possibly due to increased trade or investment flows.
• Income from Tourism: Increased significantly (From 87,316 to 220,026), suggesting a sub stantial rise in the number of Israeli tourists or their spending in Georgia. • Foreign Investment: Increased significantly (From 21,040 to 37,030), indicating growing confidence from Israeli investors in the Georgian economy.
• Total Foreign Economic Index: Increased significantly (From 360,115 to 561,843), highlighting a strengthening economic relationship across multiple dimensions.
Japan:
• Imports: Decreased (From 599,801 to 528,593), potentially due to shifts in consumer prefer ences or sourcing strategies.
• Exports: Decreased (From 9,047 to 4,212), indicating a reduced demand for Georgian goods in Japan.
• Money Flow: Decreased slightly (From 454 to 383), suggesting stable but slightly reduced financial interactions.
• Foreign Investment: Increased significantly (From 45,462 to 121,589), a notable positive development suggesting growing Japanese investor interest in Georgia.
• Total Foreign Economic Index: Remained relatively stable (From 654,764 to 654,776), with a significant increase in investment offsetting declines in trade and money flow.
Kazakhstan:
• Imports: Increased significantly (From 32,927 to 62,070), indicating a growing need for Kazakh goods in Georgia.
• Exports: Increased significantly (From 702,965 to 859,946), suggesting a strong and growing demand for Georgian products in Kazakhstan.
• Money Flow: Decreased significantly (From 199,095 to 107,997), which might require further investigation to understand the reasons behind this decline despite increased trade. • Income from Tourism: Increased significantly (From 135,300 to 505,818), indicating a sub stantial rise in tourism revenue from Kazakhstan.
• Foreign Investment: Decreased (From 43,268 to 31,596), which could be a point of concern despite the overall positive trend.
• Total Foreign Economic Index: Increased significantly (From 1,113,555 to 1,567,428), highlight ing a rapidly strengthening economic partnership driven by trade and tourism.
Russia:
• Imports: Increased (From 1,744,641 to 1,849,470), maintaining Russia's role as a key import partner, potentially due to established trade relationships and energy supplies. • Exports: Increased slightly (From 657,045 to 681,453), showing some resilience in Georgian exports to the Russian market despite geopolitical tensions.
• Money Flow: Decreased significantly (From 1,528,244 to 517,606), likely influenced by inter national sanctions and reduced financial transactions.
• Income from Tourism: Decreased significantly (From 1,163,558 to 854,068), a likely conse quence of geopolitical factors and travel restrictions.
• Foreign Investment: Decreased significantly (From 87,413 to 22,704) reflecting increased risk perception and reduced investor confidence.
• Total Foreign Economic Index: Decreased significantly (From 5,180,901 to 3,925,301), indicat ing a substantial weakening of the overall economic relationship, largely driven by declines in money flow, tourism, and investment, despite continued trade.
Turkey:
• Imports: Increased (From 2,573,256 to 2,772,054), further solidifying Turkey's position as a leading source of goods for Georgia, likely due to geographical proximity and established trade links.
• Exports: Increased (From 417,308 to 460,838), indicating a growing demand for Georgian products in the Turkish market.
• Money Flow: Decreased significantly (From 117,102 to 55,561), which warrants further analy sis to understand the reasons behind this despite increased trade.
• Income from Tourism: Decreased significantly (From 1,225,374 to 552,329), a notable decline that could be due to various factors affecting travel between the two countries. • Foreign Investment: Decreased slightly (From 143,954 to 7,870), suggesting a relatively stable but not growing level of Turkish investment.
• Total Foreign Economic Index: Decreased (From 4,476,994 to 3,923,230), indicating a weak ening of the overall economic relationship, primarily due to the significant drops in money flow and tourism revenue.
Ukraine:
• Imports: Decreased slightly (From 258,505 to 250,359), likely influenced by the ongoing conflict and disruptions to trade.
• Exports: Increased slightly (From 101,256 to 103,039), showing some resilience in Georgian exports to Ukraine despite the challenging circumstances.
• Money Flow: Showed a larger net outflow (From -3,443 to -12,119), potentially due to increased support or remittances from Georgia.
• Foreign Investment: Increased slightly (From 4,217 to 7,870), perhaps reflecting specific investment in essential sectors.
United Kingdom:
• Imports: Increased slightly (From 146,912 to 152,911), suggesting a stable demand for UK goods.
• Exports: Increased significantly (From 12,437 to 16,914), indicating a growing market for Georgian products in the UK.
• Money Flow: Increased slightly (From 46,593 to 47,245), suggesting stable financial interac tions.
• Foreign Investment: Increased significantly (From 391,924 to 448,239), a strong positive signal of growing investor confidence from the UK.
• Total Foreign Economic Index: Increased significantly (From 597,867 to 665,310), highlighting a strengthening economic relationship driven by exports and investment.
United States:
• Imports: Increased slightly (From 1,929,792 to 1,957,621), indicating a steady demand for US goods.
• Exports: Increased significantly (From 96,987 to 141,045), suggesting a growing market for Georgian products in the US.
• Money Flow: Increased significantly (From 455,284 to 565,040), indicating stronger finan cial ties, possibly through remittances or business transactions.
• Foreign Investment: Decreased significantly (From 152,289 to 98,813), which might warrant monitoring to understand the reasons behind this decline.
• Total Foreign Economic Index: Increased moderately (From 2,651,452 to 2,762,519), with growth in trade and money flow partially offset by a decrease in investment.
