December, 2019

Georgia as a Gateway to Europe and Asia

Ministry of Economy and Sustainable

Development of Georgia

Country Profile

Economic Growth

Economic growth in 2018

5.0 %Average real GDP growth projection in 2020-2024, according to IMF

4.8 %

5.0%4.6%

3.2%2.7%

2.2% 2.0%

0.0%0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Georgia Armenia Ukraine Turkey Azerbaijan Russia Belarus

ECONOMIC GROWTH PROJECTIONS 2020-2024 (IMF)

3.64.4

3.0 2.9

4.8 4.8 5.1

2013 2014 2015 2016 2017 2018 2019 Jan-Oct*

ECONOMIC GROWTH(%)

Industry14.6%

Trade13.9%

Transport 6.3%

Construction8.3%

Agriculture7.8%

Real estate11.4%

Health and social work4.2%

Education4.5%

Financial Sector6.1%

Other sectors22.9%

GDP BY SECTORS - 2018

Foreign Direct Investments

In 2017 FDI in Georgia amounted to 1,962.6mln. USD reaching all time recordhigh.

In 2018 FDI amounted to 1,265.2 mln. USD.

865.6 1,134.0 1,048.2 1,039.2 1,837.0 1,729.1 1,650.3 1,962.6 1,265.2

7.1% 7.5%6.4% 6.0%

10.4%11.6%

10.9%12.1%

7.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2010 2011 2012 2013 2014 2015 2016 2017 2018

FOREIGN DIRECT INVESTMENTS

FDI (mln. USD) FDI, % GDP

Transports and communications,

13%

Financial sector, 21%

Construction, 14%

Energy sector, 10%

Real Estate, 10%

Hotels and restaurants, 6%

Manufacturing, 11%

Other sectors, 15%

FDI BY ECONOMIC

SECTORS - 2018

In first half of 2019 FDI amounted to 473.2 mln. USD.

Azerbaijan246.4 mln. USD

Netherlands 208.4 mln. USD

United Kingdom178.8 mln. USD

TOP INVESTOR COUNTRIES 2018

External Trade

13.2

%

Aze

rbai

jan

17.7

%

Tur

key

5.8%

Aze

rbai

jan

13.5

%

Rus

sia

10.2

%

Arm

enia

7.6%

Bul

gari

a

6.6%

Ukr

aine

Top 5 trading partners in total Exports – 2019 Jan-Oct*

10.6

%

Rus

sia

9.8%

Chi

na

4,9%

Ger

man

y

Top 5 trading partners in total Imports – 2019 Jan-Oct*

Top 5 commodity positions by Exports - 2019 Jan-Oct* Top 5 commodity positions by Import - 2019 Jan-Oct*

*Preliminary dataSource: www.geostat.ge

Rapidly Increasing Market Size by FTAs

China - FTA

EFTA - FTA

Turkey - FTA

CIS - FTA

EU - DCFTA

US, Canada, Japan - GSP

India – Ongoing Consultations on FTA

Israel – Ongoing Feasibility Study on FTA

Tourism Statistics

Source : Information Centre, Information and Analytical Department, Ministry of Internal Affairs of Georgia

2014 2015 2016 2017 2018 2018/11 2019/11

Sea 0.8 0.7 0.7 0.5 0.5 0.4 0.5

Railway 1.0 0.9 0.8 0.8 0.9 1.0 1.1

Air 12.8 14.0 18.5 22.2 24.8 25.1 24.2

Land 85.4 84.4 80.0 76.5 73.8 73.6 74.3

0.0

20.0

40.0

60.0

80.0

100.0

Share (%)

5,256

5,393

6,483

7,203

INTERNATIONAL VISITORS (THOUSAND)

%

Business Friendly Environment

Doing Business(out of 190 countries)

Georgia is one of the leading

countries in the world in terms

of starting a business, dealing

with bureaucracy and the

number of procedures required

to launch and operate an

enterprise

Up from 112 in 2005

16

Economic Freedom(out of 180 countries)

Majority of Georgia’s reforms

are oriented on the

development of free, open and

transparent, private-sector

driven market economy

Up from 99 in 2005

41

Corruption Perception(out of 180 countries)

Alongside recognitions as the

top reformer in the world,

Georgia is the leader in the

wider region in terms of

fighting with corruption

Up from 130 in 2005

Crime Index(out of 125 countries)

In the last ranking of countries

by crime index, Georgia was

named as one of the safest

places in the world

World

5

Transport Network of Georgia

Tbilisi International Airport (TAV)

Capacity: 3 000 passengers per hour

Batumi International Airport (TAV)

Capacity: 600 passengers per hour

Kutaisi International Airport (UAG)

Capacity: 800 passengers per hour

Mestia Domestic Airport (UAG)

Capacity: 50 passengers per hour

Ambrolauri Domestic Airport (UAG)

Capacity: 100 passengers per hour

Natakhtari Domestic Airport (UAG)

Capacity: 50 passengers per hour

Telavi Domestic Airport (UAG)

Flight training

Poti Sea Port (APM Terminals)Berths - 15Depth: 8-11mAnnual Capacity: 4 mln tons of dry cargo, 1mln tons of oil products, 1.0 mln. Ferry cargo,500 000 TEU

Supsa Sea Terminal (BP)Annual Capacity: 8 mln tons of oil

Batumi Sea Port (BIH)Berths - 11Depth: 9-12mAnnual Capacity: 15 mln tons of oil products,2 mln tons of dry cargo, 0.7 mln. Ferry cargo,180 000-200 000 TEU, 180 000 passengers

Kulevi Sea Terminal (Socar)Berths - 2Depth: 17.10 m and 13.60 mAnnual Capacity: 6 mln tons of oil products

Total Length: 1,342 km

Annual Capacity: 28 mln tons

Total Length: 20 000 km

Capacity: min. 8-10 thousand motor vehicles, max.

50 thousand motor vehicles per day (highway)

Baku–Tbilisi–Ceyhan (BTC) pipeline (BP 30.1 %)Total Length: 1768 km

Annual Capacity: 60 mln tons

Baku-Supsa Pipeline (BP)

Total Length: 830 km, Diameter - 530 mm

Annual Capacity: 8 mln tons

Sea Ports & Terminals

PipelinesRoads

Airports

Railway

Transport Infrastructure DevelopmentExtension of Trans-European Transport Network (TEN-T)

TEN-T is divided into “Core” and “Comprehensive”networks:

,,Comprehensive“ network – covers the whole EUregion and includes all transport modes

,,Core“ Network - is a part of the comprehensivenetwork consisting of the most importanttransport connections and is considered as a highpriority

Completion of the TEN-T Core Network is planned by2030 and of the Comprehensive Network by 2050

High-level Understanding between Georgia and the EUon the Trans-European Transport Network Extensionto Georgia was signed in Brussels on 18 July 2018

Extension of the TEN-T to the Eastern Partnership(EaP) region officially came into force on 9 January2019

Transport Infrastructure DevelopmentTEN-T Investment Action Plan

On 15 January 2019, the EuropeanCommission published the Indicative TEN-TInvestment Action Plan

The Indicative TEN-T Investment ActionPlan identifies priority investments of around12.8 billion Euros for the EaP countries

According to the Investment Plan, 18 priorityprojects with the total cost of around 3.4 blnEuros have been identified in Georgia

Completion of the priority projects listed inthe Investment Action Plan is envisaged by2030

Large-scale Railway Project by Georgia and Neighbouring Countries

Baku - Tbilisi - Kars Railway

Rehabilitation, reconstruction andconstruction of the 180 km-long railway line

Capacity: 5 - 15 mln tons, 1 mln passengersMajor construction works on the Georgian

territory has been completedBTK line is currently in the testing mode

Implementation of Large-scale Transport Infrastructure ProjectsDonors and Partners

Kuwait Fund

ADB – Asian Development Bank

WB – World Bank

JICA – Japan International Cooperation Agency

EIB – European Investment Bank

EU – European Union

AIIB – Asian Infrastructure Investment Bank

Development of Transport Routes and Corridors

Georgia is a member since 2016Georgia is a member since 1993

Development of Transport Routes and Corridors

Lapis Lazuli RouteBlack Sea - Caspian Sea Transport Corridor

Participating countries: Afghanistan,Turkmenistan, Azerbaijan, Georgia, Turkey

Participating countries: Turkmenistan,Azerbaijan, Georgia, Romania

Persian Gulf-Black Sea Corridor

Participating countries: Iran, Azerbaijan,Armenia, Georgia, Bulgaria, Greece

Railway - Based Multimodal Transportation between Europe and AsiaMiddle Corridor

Note: Khorgos - Georgia Lead time: 9-10 daysLianyungang - Khorgos Lead time: 5 days

One Stop Shop Principle

Reduced transit formalities

Paperless environment

Effective control mechanism based on risk management

Customs Clearance Zone - One Place, Multiple Services

Clearance of goods

Different options for clearances

Physical inspection of goods and commodity expertise

Free Parking Zone

Certificates and permitsBank Service

Unified Electronic System of Licenses, Permits and Certificates

Ministry of Interior

Ministry of Economy and Sustainable

development

Ministry of Defense

Ministry of health

Ministry of Agriculture and Natural Resources

Ministry of Culture and Sport

At present 7 state agencies are part of thesystem issuing about 25licenses/permits/certificates.

More than 50% among them are issuedby Georgia Revenue Service.

Online validation of Certificate of Originfor CT1 in place.

Same system is Planned with China

Preferential tax environment

Introduction of Free Trade Zones

- Re-export free of guarantee- Exempt from corporate income

tax

China-Europe Projections

220 132 198 1,332

8,930

21,250

-

5,000

10,000

15,000

20,000

25,000

2015 2016 2017 2018 2019 Forecast

2020Forecast

Total TEU Factors:

Increased tendency in transportation of tomato pasta toItaly

Block trains from Lianyungang to Istanbul

Local export and transit from Turkey

Rhine-Danube direction development

Statistics

403,447

446,972

379,816

329,805

394,787

453,938

319,870

370,128

526,059

2013 2014 2015 2016 2017 2018 2017/102018/102019/10

Number of Containers (TEU) Handled by Georgia’s Sea Ports in 2013-2019

37.2% growth in container business in 2018 compared to 2017

Growth in railway freight in TEU

Transported cargo by Georgian Railway

+15.0%

Local18.1%

Export11.6%

Import28.7%

Transit41.6%

2018

+42.1%

33.6% growth in container business in 2019/10 compared to 2018/10

1,000

2,500

4,000

5,500

7,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2019 2018 2017 2016 2015 2014

Local16%

Export12%

Import24%

Transit48%

2019/10

Statistics

0.7 0.9 1.0 1.4 1.3 1.0 1.2

3.1 3.0 3.4 3.8 4.03.3 3.6

2.6 2.7 2.93.6 4.0

3.33.9

2014 2015 2016 2017 2018 2018/10 2019/10

Export Import Transit Total

International Road Transport of Goods in 2014-2019 (mln. tons)

Bilateral and Multilateral Intergovernmental Transport Agreements

In total, 104 bilateral and multilateral

agreements are concluded:

Civil Aviation- 38

Maritime Transport - 22

Road Transport- 31

Railway Transport- 11

Transport Corridor- 2

Planned Bilateral Intergovernmental Transport Agreements

Work continues on 27 bilateral

agreements

Civil Aviation-

Maritime Transport - 4

Road Transport- 4

Thank you for your attention