On 3 March 2015, at the plenary session of the Parliament of Georgia, United National Movement MP, Zurab Japaridze, stated: "Our economy is growing about twice as slowly as it was before 2012. The Georgian economy has lost GEL 4 billion in the past three years."FactCheck
took interest in this statement and verified its accuracy.
The growth of the country’s economy is determined by the changes in its GDP which is the overall value of all final goods and services produced in the country during the given year.
A 5% growth of the GDP was planned by the government in 2014. According to the preliminary data, the real growth of the GDP amounted to 4.7%. In line with government forecast, a 5% growth was also planned for 2015; however, according to the statement of the Minister of Economy and Sustainable Development of Georgia, Giorgi Kvirikashvili, the country’s economic growth will be about 2% in 2015. The state budget will also be modified due to the changes in the economic growth forecast.
We looked into the trends of growth of the Georgian economy from 2004 to date.
Growth Rate of the GDP of Georgia from 2004 to 2015
|Year||GDP Growth Rate|
|2014||4.7% (Preliminary Data)|
|2015||2% (Forecast Data)|
As the table above illustrates, the lowest economic growth rates for the past ten years were recorded in 2008 and 2009 (2.6% and -3.7%) which was mainly due to the 2008 August war with Russia and the 2009 world economic crisis. The average growth rate of the economy was 6.2% from 2004 to 2012. As for the average growth rate from 2013 to 2015, it is equal to 3.3%. Hence, the economic growth rate is almost twice as low now as it was before 2012.
The planned growth of the nominal GDP was 9.7% in 2013 whilst the actual growth amounted to only 2.6%. This means that a total of GEL 1.8 billion less products were created than was determined by the forecast of the government.
In 2014, the government forecast an 8.7% growth of the nominal GDP which, by preliminary data, grew by 8.7% indeed and amounted to GEL 29,716 million. Despite the fact that according to the preliminary data the actual economic growth lived up to the forecasts of the government, it still failed to reach the planned benchmark which was due to the low growth rate in 2013. In this case, GEL 176 million less wealth was created in the economy of the country.
As for the current year, according to the forecasts of the government, the nominal GDP growth rate should have reached 9.2%. However, as already pointed out, the government decreased the forecast growth rate of real GDP from 5% to 2%. Hence, the growth of nominal GDP will be decreased by 3%. If we assume that the nominal GDP will grow by 6.2% in 2015, the economy must reach GEL 31 billion in 2015 which is GEL 875 million less than the initial forecast of the government.
Based upon these data we can say that if the economy of the country were to grow according to the nominal GDP growth forecasts from 2013 to 2015, the GDP of the country would be GEL 2.9 million more in 2015.
The real GDP grew by an average of 6.2% every year from 2004 to 2012. The average growth rate of the GDP decreased to 3.3% from 2013 to 2015. Hence, we can say that the economic growth rate is almost twice as low now as it was before 2012.
Significantly less wealth was created in the country as compared to the forecast growth rates of the government. The economy grew by GEL 1.8 billion less in 2013 whilst the difference from the forecast growth was GEL 1.1 billion in 2014-2015. In total, the economy of the country lost about GEL 2.9 billion in the past three years and not GEL 4 billion (in the case of the forecast 6.2% growth of nominal GDP in 2015) as stated by the MP.FactCheck concludes that Zurab Japaridze’s statement: "Our economy is growing about twice as slowly as it was before 2012. The Georgian economy has lost GEL 4 billion in the past three years," is MOSTLY TRUE.