The messenger logo

FDI in Q2 reached $237.8 mln

By Natalia Kochiashvili
Wednesday, September 9
The National Statistic Office of Georgia (Geostat) released the preliminary data on September 8, according to which the foreign direct investment in Georgia reached $ 237.8 million in the second quarter of 2020, over 38% increase compared to $171.8 mln in the first quarter of 2020.

The amount of the FDI in Q2 2020 is 0,5% up compared with the same period last year, however, the sum of the FDI during the first two quarters of 2020 saw over 25% decrease as compared to the first half of 2019.

As for the sectors, the largest share of FDI was registered in the financial sector, reaching $78.1 million in Q2 2020, the energy sector was second ($29.6 million), followed by the construction sector ($27.7 million).

The UK holds the biggest share of the FDI in Georgia with 24.8% in Q2 2020, followed by Netherlands (22.4%) and Turkey (13.3%).

Georgian Economy Minister Natia Turnava says that the increased rate of foreign direct investment in the second quarter of 2020 proves that despite the pandemic the Georgian economy is gradually recovering.

“The increase in reinvestment indicates that foreign investors are not making a profit from Georgia, but leaving it in the country and creating new jobs,” Turnava commented concerning the growth of foreign direct investment in the second quarter of 2020 that was mainly due to the increase in reinvestment. The volume of reinvestment in the second quarter of 2020 increased by 63.5% and amounted to $144.7 million which accounted for 60.8 % of total foreign direct investment.

“If we look at the structure of foreign direct investment, reinvestment prevails. This means that not only new investments are coming in, but already existing investors are so confident in the Georgian economy and its future that they are expanding their production and profits, which they receive in Georgia,” Turnava noted.

According to Beka Liluashvili, the prime minister's advisor for economics, the increase in foreign direct investments indicates that investors trust Georgia's economic policy.

“While the economy declined by 7.7% in June we saw that in July the economy shrank 5.5%, meaning that the economy has already moved to a recovery phase after stabilisation,” he added.

International investment location scouts from leading European and US companies KPMG, Conway, and GDP Global are visiting Georgia for the first time to discover the country's investment potential and state programs oriented towards industrial development.

“Notwithstanding the ongoing global challenges, we have managed to bring highly experienced and skilled investment location consultants to Georgia. I am happy that we have made this first, very important step forward following our strategy and action plan”, Mikheil Khidureli, Enterprise Georgia CEO said.

According to him, to attract foreign investment to Georgia and popularize the country’s investment potential, partnering with location consultants represents one of the main directions for the agency.