when he stated that every country’s economy started to grow at the end of 1998, including Georgia’s, although Europe and the CIS region are currently experiencing an economic crisis. He added that Georgia is number-one in Europe in terms of the GDP growth rate even against the difficult background and registered an 11% economic growth rate in 2003 under Eduard Shevardnadze’s office and a 12% economic growth rate in 2007 when Mikheil Saakashvili was the president. In neither of these cases, as Mr Ivanishvili underlined, did Georgia manage to be a leader in Europe and the CIS region in terms of economic growth.
On 30 April 2015 Bidzina Ivanishvili reiterated the aforementioned statement and added that Georgia was still a leader in Europe and the CIS region in terms of the growth of the economy.FactCheck
took interest in the accuracy of Mr Ivanishvili’s statement.
A country’s economic growth is defined by the changes in its Gross Domestic Product (GDP). The GDP is the standard measure of the value of the final goods and services produced by a country during a period of one year. The Government of Georgia planned a 5% growth of the country’s economy for 2014. According to the preliminary data of the National Statistics Office of Georgia, the real growth of Georgia’s GDP was 4.8% (the final data of the country’s economic growth will be published in September 2015).
The Government of Georgia planned a 5% economic growth for 2015 as well. However, the Minister of Economy and Sustainable Development, Giorgi Kvirikashvili, stated that the economy would grow by 2% this year. The International Monetary Fund has made an identical forecast.In order to verify Bidzina Ivanishvili’s statement, we consulted the World Economic and Financial Survey published by the International Monetary Fund in April 2015. The survey divides European countries into two categories: developed countries (with a GDP per capita of more than USD 15,000) and developing countries (with a GDP per capita below USD 15,000). The economic growth rate for the group of Europe’s developed countries was 1.3% in 2014 whilst the economic growth rate for the group of Europe’s developing countries was 2.8%. It must be noted that the average economic growth rate for EU member states equalled 1.4% in 2014. FactCheck
analysed the performance of the top five European countries with the highest economic growth rates.
Preliminary (2014) and Estimated (2015) Economic Growth Rates of Europe’s Developed Countries
As illustrated by the table, Ireland had the highest economic growth rate (4.8%) in 2014. According to the same survey of the International Monetary Fund, Georgia’s economy grew by 4.7% in the same period. According to the forecast for 2015, Georgia lags behind all of the aforementioned five countries in terms of the economic growth rate.Georgia is a country with a developing economy. Therefore, it is inappropriate to compare Georgia’s economic growth rate to the economic growth rate of those European countries with developed economies. In his statement, Bidzina Ivanishvili has compared Georgia’s economic growth to the economic growth of Europe’s developed and developing countries. Generally, countries with developed economies have a relatively lower economic growth rate (see the link)
whilst countries with developing economies have the potential for greater economic growth.
As concerns Europe’s developing countries (see Table 2), Georgia did indeed have the highest economic growth rate among them in 2014. According to the forecast for 2015, only three European countries have lower economic growth rates than Georgia. However, notwithstanding the fact that Georgia is considered to be a developing country similar to those in Europe, the GDP per capita is much higher in those developing countries than it is in Georgia (USD 3,699). Bosnia Herzegovina has the lowest GDP per capita (USD 4,643).
Preliminary (2014) and Estimated (2015) Economic Growth Rates of Europe’s Developing Countries
|Country||2014||2015||GDP Per Capita (USD)|
It must be noted that Georgia used to have higher economic growth rates in 2005-2007 as compared to Europe’s developing countries. In 2010-2011, it lagged only behind Turkey and then regained the first position in 2012 whilst lagging behind Turkey, Romania, Montenegro and Kosovo in 2013.FactCheck
also took interest in verifying the GDP growth rates of those countries whose GDP per capita fluctuates in the margins of USD 3,500-4,000, similar to Georgia.
GDP Growth Rates of Countries with USD 3,500-4,000 GDP Per Capita
|Country||2014||GDP Per Capita|
As of 2014, nine countries had a GDP per capita in the margins of USD 3,500-4,000. Of these countries, Sri Lanka had the highest economic growth rate (7.4%) in 2014. According to the data, Georgia is ranked fourth.
CIS Member State Economic Growth Rates (2014-2015)
Of particular mention is that Georgia had a higher economic growth rate in 2003, 2007, 2011 and 2012 as compared to both Europe’s developed and developing countries.
As concerns Georgia’s ranking in the CIS region, both in 2003 and 2007 Armenia and Azerbaijan surpassed Georgia in terms of their economic growth rates whilst Georgia ranked third in 2011 among the CIS countries, behind Turkmenistan and Tajikistan. Tajikistan, Uzbekistan and Turkmenistan each registered higher economic growth rates than Georgia in 2014.
Georgia’s economic growth rate has been higher than those rates of other European countries multiple times although this was not the case in 2014 and, moreover, Georgia has never been a leader in the region. According to the economic growth forecasts for 2015, Uzbekistan, Turkmenistan and Tajikistan each expect higher economic growth rates than Georgia whilst Kazakhstan, like Georgia, will have a 2% economic growth rate.
Additionally, it is necessary to underline that the economic growth of European countries did not decrease in the last year. In 2012, the economy of European Union member states decreased by 0.4% and rose by 0.1% in 2013 whilst there was 1.4% economic growth registered in 2014. Therefore, it is incorrect to say that Europe is in crisis (it is especially wrong to compare it to the 1998 crisis) whilst Georgia’s economy is growing against this background.Georgia, with its 4.8% economic growth rate, occupied the 52nd place among the 151 developing countries in 2014 whereas it is in the 115th
place according to the forecast for 2015 (2%). The highest economic growth rate in 2014 was registered in Turkmenistan (10.3%) and Ethiopia (10.3%).
According to the preliminary data of the International Monetary Fund’s April survey, Ireland had the highest economic growth rate (4.8%) among European countries in 2014. The GDP per capita is much higher in other European countries than it is in Georgia which means that in the cases of an equal economic growth rate (%), the income growth of European countries will be much higher in nominal numbers than that of Georgia.In the period of 2005-2012, except from 2008-2009 crisis, Georgia had a higher economic growth rate as compared to Europe’s developed countries. In 2013-2014, Georgia also had a higher economic growth rate than Europe’s developed countries but not as high as in 2005-2012. Moreover, among Europe’s developing countries, Georgia lagged behind only Turkey in 2010-2011 when it (Georgia) moved to the 5th
place in 2013.
As concerns Georgia’s place among the CIS countries, Georgia has never had the highest economic growth rate among members. This was true in 2014 as well when Tajikistan, Uzbekistan and Turkmenistan each registered higher economic growth rates than Georgia. In 2014, the economy of the CIS countries grew by 1% on average. Even though the economic growth rate of the region has decreased as compared to the previous year, this did not have any impact upon Georgia’s ranking position.Of those countries whose GDP per capita in 2014 was USD 3,500-4,000, Georgia is ranked in the 4th
position in terms of the economic growth rate. As for the forecast for 2015, Georgia is no longer among the leading countries either in Europe or in the region.
The economy of the European Union member states grew by 1.4% in 2014. Therefore, it is groundless to talk about the crisis in Europe (especially in the context of the 1998 crisis).FactCheck concludes that Bidzina Ivanishvili’s statement is MOSTLY FALSE.
_________________________  Georgia does not recognise the independence of Kosovo.