On 11 April 2016, commenting upon the NDI’s public opinion polls, a member of the Parliamentary Majority, Gia Zhorzholiani, stated: "The economic situation has worsened globally… There is a difficult situation in Europe and a problematic situation in southern Europe and the Asian countries. Generally, as compared to the region and the European Union, Georgia’s economic growth rate is high. Of course, this is absolutely not enough and, naturally, the population is not satisfied with the economic growth rate."FactCheck
verified whether or not Georgia has a high economic growth rate as compared to our region and the countries of the European Union.
Georgia’s economy grew by 2.8% in 2015. According to the prognosis of the Government of Georgia, the economic growth rate will be 3% in 2016. The preliminary economic growth rate of January-February 2016 is already known and is at 1.7%.
In order to see how Georgia’s economy grows as compared to the countries of our region and those of the European Union, we need to consult the data of international organisations.Even though Georgia is no longer a member of the Commonwealth of Independent States (similar to Ukraine), the International Monetary Fund puts both Georgia and Ukraine in the same group with other CIS member countries. In the CIS region, Georgia holds the 6th position in terms of its economic growth rate as of 2015 (see Table 1). Uzbekistan registered the highest economic growth rate (8.0%). Our immediate neighbour, Armenia, ranks above us as well. Ukraine has the worst economic growth rate as its economy shrunk by 9.9% in 2015. According to the prognosis for the economic growth rate for 2016, Georgia with its 2.5% expected economic growth rate ranks 5th
among the CIS countries.
Economic Growth Rate in CIS region countries
According to the classification of the World Bank, Georgia is grouped in the region comprising Eastern Europe and Central Asia’s developing countries. This means that the 12 countries of Eastern Europe are added to the countries of the CIS region. In this group, we have the following picture (see Table 2): Georgia is 10th out of 13 countries in terms of its economic growth rate in 2015 whilst ranking 9th
according to its economic growth rate in 2016. In both cases, we are outperformed by our neighbour, Turkey. Additionally, we have to take into consideration the fact that Georgia’s economy is less developed as compared to the aforementioned 12 Eastern European countries and, therefore, has more potential for achieving a high economic growth rate.
Economic Growth Rate in Developing Countries of Eastern Europe
|Bosnia and Herzegovina||2.8||3.0|
Gia Zhorzholiani compares Georgia’s economic growth rate to the economic growth rates of the countries of the European Union which is incorrect. Generally, countries with higher income have less potential for economic growth than poorer countries with less income. The EU member states with their high incomes consider a 2%-3% economic growth rate as success. However, we did compare Georgia’s economic growth rate to the economic growth rates of the EU countries. According to the economic growth rates in 2015, Georgia is outperformed by 11 EU member states and by 10 member states in 2016. For instance, Ireland’s economy grew by 7.8% in 2015 whilst Malta’s economic growth rate was 5.4%.In terms of its economic growth rate in 2015, Georgia holds the 88th place among the 151 developing countries although it will move down to the 98th
place based upon the prognosis for 2016. In total, the world economy grew by 3% in 2015, the economy of developing countries by 4%, the economy of developing Asian countries by 6.6% and the economy of developing European countries by 3.5%.
Georgia’s economic growth rate has dropped considerably since 2013. In 2012, the economy grew by 6.4% and the economic growth rate was 3.3% in 2013. The year 2014 was better as compared to 2013 with the economic growth rate reaching 4.6%. Since 2015, however, the economic growth rate has started to drop again (see Graph 1).
Georgia’s Economic Growth Rate
Conclusion Georgia’s economic growth rate cannot be considered as a success either in the region or as compared to the EU countries. In terms of its economic growth rate, Georgia was 6th among the CIS countries in 2015 and will move to the 5th position based upon the prognosis for 2016. Additionally, as compared to the developing countries of Eastern Europe, Georgia holds the 10th position in 2015 and will move to the 9th
place based upon the prognosis for 2016.
A comparison of developing country’s (Georgia) economic growth rate to the economic growth rates of developed countries (most of the EU member states) is incorrect as the developing country has a greater potential for economic growth. Notwithstanding this fact, Georgia was outperformed by 11 countries of the EU in terms of the economic growth rate in 2015.FactCheck concludes that Gia Zhorzholiani’s statement is FALSE.