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On 29 October 2014, whilst delivering a speech at the International Investment Forum, the Prime Minister of Georgia, Irakli Gharibashvili, stated: "Trade turnover between Georgia and the European Union increased by 15% in the first half of 2014 as compared to the same period of 2013. In addition, a 41% growth in export and an unprecedented 9% growth in import as compared to 2013 have also been recorded."

FactCheck

took interest in this statement and verified its accuracy.

According to the data of the National Statistics Office of Georgia, the foreign trade turnover of Georgia with European countries amounted to USD 1.4 billion from January to June 2014 which is 15% more than in the same period of 2013. From this amount, export equalled USD 296 million (41% more) and import was USD 1.1 billion (9% more). The share of the European countries in the foreign trade turnover of Georgia amounted to 26%, 21% in export and 28% in import (26%, 17% and 29%, respectively, from January to June 2013). European Union member states also constituted 31% of the trade deficit of Georgia (36% from January to June 2013).

The overall foreign trade turnover of Georgia (except unorganised trade) amounted to USD 5.4 billion in the first two quarters of 2014 which is 16% more than that of the same period of the previous year. From this amount, export equalled USD 1.4 billion (15% more) whilst import amounted to USD 4 billion (16% more).

According to the data of the National Bank of Georgia, export decreased by GEL 48.1 million in the third quarter of 2014 as compared to the same period of 2013. Export from Georgia to the European Union decreased by GEL 28.1 thousand.

As already mentioned earlier, Irakli Gharibashvili made his statement on 29 October. The National Statistics Office of Georgia had already published its data of the first three quarters of 2014 by that time. The preliminary report on Georgia’s foreign trade was published on 16 October whilst the final report was published on 24 October.

According to the final report, the foreign trade turnover with EU countries amounted to USD 2.1 billion from January to September 2014 which is 8% more than that of the same period of the previous year. From this amount, export equalled USD 458 million (23% more) whilst import amounted to USD 1.7 billion (5% more). The share of the EU countries in the foreign trade turnover of Georgia reached 26%, 21% in export and 28% in import (27%, 18% and 30%, respectively, from January to September 2013). The European Union member states also constituted 31% of the trade deficit of Georgia (36% from January to September 2013).

The foreign trade turnover of Georgia amounted to USD 8.3 billion in the first three quarters of 2014 which is 10% more than in the same period of the previous year. From this amount, export equalled USD 2.1 billion (7% more) whilst import amounted to USD 6.2 billion (12% more).

Hence, the foreign trade turnover growth between Georgia and the European Union is much higher in the first half of 2014 than in the first three quarters of same year.

Chart 1: 

Trade Turnover Growth between Georgia and the European Union in 2014 (%)

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 We took interest in the foreign trade turnover growth rate in the first two quarters of the previous years. The foreign trade turnover of Georgia with the European Union grew by 31% from January to June 2011 (export – 26%, import – 32%). The growth rate amounted to 32% in 2012 (export – 15%, import – 36%). The foreign trade turnover of Georgia with the EU decreased by 10% in the first half of 2013 (the overall foreign trade turnover of Georgia decreased by 3% in that period). It should be noted that export from Georgia to the EU grew by 6% whilst import decreased by 13%.

Chart 2:

Growth and Reduction of Trade Turnover between Georgia and the European Union in the First Two Quarters from 2011 to 2014 (%)

image002

Conclusion

According to the data of the National Statistics Office of Georgia, Georgia’s foreign trade turnover with the European Union increased by 15% in the first half of 2014, export increasing by 41% and import increasing by 9%. The share of the EU member states in Georgia’s foreign trade amounted to 28% (26% in the same period of the previous year).

It should be noted that Irakli Gharibashvili made his statement on 29 October. The National Statistics Office of Georgia had already published its data of the first three quarters of 2014 by that time. However, the Prime Minister did not talk about these data. Presumably, the reason for this is that the trade turnover growth between Georgia and the EU was significantly lower in the first three quarters of 2014 than in the period referred to by Mr Gharibashvili (the first half of the year).

It should also be noted that the foreign trade growth was much higher in the first two quarters of 2011 and 2012 than in 2014. In addition, the first two quarters of 2013 (which was used by the Prime Minister for the comparison with the same period of 2014) saw a significant decrease in foreign trade (especially import).

Hence, Irakli Gharibashvili’s statement: “Trade turnover between Georgia and the European Union increased by 15% in the first half of 2014 as compared to the same period of 2013. In addition, a 41% growth in export and an unprecedented 9% growth in import as compared to 2013 have also been recorded,” is HALF TRUE.

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