According to the Minister of Finance of Georgia, Nodar Khaduri, Georgia is a leader in its category by its economic growth rates based upon the information of the International Monetary Fund and the World Bank.FactCheck
took interest in the facts stated by Mr Khaduri and verified their accuracy.According to the data of the World Bank,
the expected economic growth rate of Georgia equals 5%. In addition, according to the official forecast of the Government of Georgia (attached to the 2015 state budget plans), a 5% economic growth is expected in 2014. Hence, the part of Mr Khaduri’s statement saying that the expected economic growth of Georgia in 2014 is 6% based upon the information of the World Bank is not entirely accurate. However, according to the National Statistics Office of Georgia, the economic growth of Georgia in the first two quarters of 2014 reached 6% with this rate for the first eight months of 2014 at 6.1%. Presumably, when making his statement Nodar Khaduri relied upon these data.FactCheck
also checked the second part of Mr Khaduri’s statement where he compared the expected economic growth of Georgia to that of other countries.
Based upon the data of the International Monetary Fund, Georgia is still grouped with the Commonwealth of Independent States members. The group contains the former Soviet republics with the exception of the Baltic States. According to the data of the expected GDP growth of these countries, Georgia holds the fourth position out of the 12 countries. The real expected GDP growth of Georgia is 5.03%. Turkmenistan (10.12%), Tajikistan (6%) and Uzbekistan (7%) occupy the first three positions. Based upon the data of the International Monetary Fund, the expected economic growth of Armenia is 3.18%.
Table 1: Economic Growth Forecast of Post-Soviet States (International Monetary Fund)
Taking into account that Georgia is not a member of the Commonwealth of Independent States and has chosen the path of European integration, it would be sensible to assume that in his statement, the Minister of Finance of Georgia talked about the developing countries of Eastern Europe. According to the International Monetary Fund, none of the countries in the group of the developing countries of Eastern Europe has an expected growth of more than 3.4% (see Table 2) which means that the growth rate of Georgia is indeed the highest in the group. In addition, the expected growth rate of the Georgian economy in 2015 (5%) is also higher than those rates of the developing states of Europe.
Table 2: Economic Growth Forecasts of the Developing States of Europe
|Bosnia and Herzegovina||0.7||3.5|
According to the classification of the World Bank, Georgia falls in the category of Eastern European and Central Asian countries. The aforementioned category includes 20 states, most of which are former Soviet Union or former Yugoslavia member states.
Table 3: Expected Economic Growth Rates of Eastern European and Central Asian States (World Bank)
|Bosnia and Herzegovina||2.0||3.5|
Source: World Bank
As Table 3 makes clear, Kazakhstan (5.1%), Azerbaijan (5.2%), Kyrgyzstan (6.5%), Tajikistan (6.3%) and Turkmenistan (10%) occupy higher positions than Georgia by the expected growth rate of their GDP. Accordingly, Georgia does not occupy the first place according to these data. It should also be noted that the expected economic growth rate of Armenia in 2014 is identical with that of Georgia based upon these data.
For additional information, it is also interesting to know the reason for the 6% growth of the Georgian economy in the first half of 2014 which makes it much more realistic to reach the 5% expected growth rate by the end of the year. According to the National Statistics Office of Georgia, the highest growth rates were observed in the following sectors of the economy: construction (16%), the processing industry (11%), trade (9%), finances (8%) and transport and communications (7%). In total, the biggest role in the 6% economic growth was played by trade – 1.4%, the processing industry at 1.1%, construction at 0.9% and transport and communications at 0.8%.
The Minister’s statement that the expected economic growth rate of Georgia in 2014 is 6% is not entirely accurate. According to the estimations of the World Bank, the expected economic growth rate of Georgia is 5%. However, according to the preliminary data of the National Statistics Office of Georgia, the economy of Georgia grew by 6.1% in the first eight months of 2014.As for Georgia being a leader in the region by its economic growth, the statement of the Minister is also not entirely true in this part. FactCheck
looked into the data of both the International Monetary Fund and the World Bank. According to the International Monetary Fund, Georgia holds the fourth position among the countries of the Commonwealth of Independent States and the first position among the countries of the developing European states.
According to the regional classification of the World Bank, Georgia falls in the category of the Eastern European and Central Asian states and has a lower expected economic growth for 2014 than some of them (Azerbaijan and all five countries of Central Asia). The expected economic growth rate of Armenia is identical to that of Georgia (5%).FactCheck concludes that Nodar Khaduri’s statement: "According to the World Bank, Georgia has the highest economic growth. If we have a 6% economic growth, the country holding the second position in our category – Armenia, has a 3.2% growth," is HALF TRUE.