On 25 November 2016, in his speech before the Parliament of Georgia, United National Movement member, Giga Bokeria, stated: “With such an economic growth, be it less than 3% or even 3.5%, our country will not manage to catch up to the poorest member state of the European Union in 100 years. This means that the well-being of our citizens is far behind that of European Union citizens.”FactCheck
verified the accuracy of Giga Bokeria’s statement.
For a comparison of the levels of the economic development of different countries, the GDP per capita is the most accurate macroeconomic indicator.
According to the 2017 draft budget published by the Ministry of Finance of Georgia, the estimated GDP per capita for 2016 is USD 3,772 which is 0.8% more as compared to the GDP per capita registered in 2015. However, of note is that the nominal (in current prices) GDP per capita growth rate in 2012-2016 decreased as compared to the previous years which means that the well-being of Georgia’s population has been rising at a slower pace as compared to the previous years.Of additional note is that whilst calculating the GDP per capita in 2015-2016, the National Statistics Office of Georgia took the results of the 2014 universal public census into account. According to this public census, the population of Georgia decreased by 657,731 persons as compared to 2002 which naturally resulted in an increasing of the nominal GDP per capita. However, the National Statistics Office of Georgia did not use the public census results to make respective corrections in the 2003-2014 economic data. Thus, FactCheck
consulted the data of the International Monetary Fund which are compiled by taking Georgia’s general demographic trend into account.
Georgia’s Nominal GDP Per Capita (USD)Source: National Statistics Office of Georgia, International Monetary Fund
In 2012-2016, the real GDP (economy) growth rate was on the decline (2014 being the only exception). Georgia’s economy grew by 6.4% in 2012, by 3.3% in 2013, by 4.6% in 2014 and by 2.9% in 2015. In 2016, the estimated economic growth rate will be 2.7%.
According to the International Monetary Fund and based on the data for 2016, the poorest country in the European Union is Bulgaria whose GDP per capita constitutes USD 7,091.
EU Member States’ Nominal GDP Per Capita and Economic Growth Rate for 2016
|Country||Nominal GDP Per Capita||Economic Growth %|
Contrary to Georgia’s economy, Bulgaria’s economic growth rate in 2012-2016 has had a trend of improvement. In 2016, Bulgaria’s real GDP growth rate was 3.0%.
If Georgia’s economic growth rate remains at the 2016 level or is equal to 3%, the country will never catch up to Bulgaria. In the case if our economic growth rate reaches the 3.5% mark, it will take 131 years for Georgia to achieve an equal and higher GDP per capita as compared to the poorest member state of the EU. If Bulgaria’s real GDP remains at the 2016 level and does not grow, it will take 18 years for Georgia with its 3.5% economic growth rate to match Bulgaria’s real GDP.In the case of achieving identical economic growth rates, Georgia would catch up to Croatia, which is in the 26th place, in 34 years; to Latvia, which is in the 23rd place, in 39 years; to Estonia, which is in the 20th place, in 46 years; to Cyprus, which is in the 15th place, in 54 years; to the Netherlands, which is in the 5th place, in 73 years; to Denmark, which is in the 3rd
place, in 77 years, and to the richest country in the EU, Luxembourg, in 97 years. This will happen only in the case if all of the aforementioned countries remain at their 2016 levels.
Conclusion In order to verify the accuracy of Giga Bokeria’s statement, FactCheck
compared the GDP per capita of Georgia and Bulgaria (the lowest income country of the EU). The comparison illustrated that by keeping the present economic growth rates, the GDP per capita of Georgia and Bulgaria will only become equal after 131 years.FactCheck concludes that Giga Bokeria’s statement is TRUE.