Galt & Taggart economist Lasha Kavtaradze says that foreign direct investment [FDI] has returned to its natural level and increased in 2022-2023 due to one-off transactions. These included the sale of Rustavi Azot and Georgian Water and Power.
Last year, FDI fell by 30% year-on-year to $1.3 billion. According to Geostat, the reason was a decline in two components of foreign direct investment: equity capital and reinvestment.
"If we look at investments at the component level after the pandemic, [the growth] is mainly due to reinvestments. In 2024, the share of reinvestments in foreign direct investments was 88%, which is quite high. This means that foreign investors are actually staying in the Georgian market and reinvesting. One thing we should pay attention to is that share capital increased in 2022-2023, although as we said, due to one-time factors. There is still a lack of equity capital, which means new foreign direct investments," Kavtaradze said.
