Paata Kvizhinadze: “The economy will reach GEL 103 billion this year — four times higher than in 2012.”

Verdict: FactCheck concludes that Paata Kvizhinadze’s statement is HALF TRUE.

The GDP in current prices totalled GEL 27.9 billion in 2012 whilst the 2025 forecast is 3.7 times higher at GEL 103 billion — but this increase reflects only the nominal figure. Consumer prices have risen by 68% since 2012. Accordingly, the real growth rate drops significantly when measured in constant prices, accounting for inflation. The economy will have grown from GEL 36.2 billion to GEL 71.6 billion in constant 2019 prices.
Comparing the GDP per capita in USD with 2020 is also misleading. Besides the fact that 2020 is not a relevant base year — as the growth in 2021 mainly stemmed from reopening businesses closed during the pandemic — inflation and exchange rate fluctuations remain a challenge. The average exchange rate against USD was 3.11 in 2020 whilst in January-May 2025 it is 2.79. Thus, although the GDP per capita is set to rise from USD 4,300 to USD 9,900 between 2020 and 2025 (based on the projection for 2025), if calculated in the national currency and at constant prices, the increase is from GEL 12,500 to GEL 19,400.
The country’s total economy for 2025 should have grown by 300% as compared to 2012 and the GDP per capita by 130% as compared to 2020, according to Paata Kvizhinadze. However, the real economy will have grown by 97% as compared to 2012 whilst the GDP per capita’s growth would be 54% as compared to 2020 based on available official data.
Whilst the nominal figures are more or less correct, ignoring inflation and exchange rate shifts, which would halve the real growth rate, FactCheck concludes that Paata Kvizhinadze’s statement is HALF TRUE.

Analysis

Commenting on the economy, Paata Kvizhinadze stated: “We expect a high economic growth this year as well, reaching GEL 103 billion, which is four times higher than in 2012. The GDP per capita will exceed USD 10,000 this year (2020 — USD 4,300).”

The GDP at current prices totalled GEL 28 billion in 2012 and GEL 92 billion in 2024. The projection for 2025 is GEL 103 billion — 3.7 times higher.

The GDP calculated at current prices does not account for inflation which is a significant factor. An increase in income from GEL 100 to GEL 200 for an individual does not mean they are twice as well-off; what matters is how many goods and services could be purchased for GEL 100 in the first year and for GEL 200 in the second. The same principle applies to the overall economy. If a country still produces 100 loaves of bread, but the price of a loaf rises from GEL 1 to GEL 1.5, the nominal economy grows by 50% whilst the real economy does not grow at all. In theory, a country’s GDP in local currency can soar whilst the real economy contracts under hyperinflation. Despite a 6.3% decline in 2020, the nominal economy still grew slightly — from GEL 49.7 billion to GEL 49.8 billion.

To determine how much the economy has actually grown over time, the GDP must be calculated at constant prices or GDP growth rates must be multiplied sequentially.

The GDP rose from GEL 36.2 billion to GEL 67.5 billion between 2012 and 2024 in 2019 constant prices. The 2025 budget is based on a 6% growth rate which means that the GDP in 2019 prices will reach GEL 71.6 billion — twice the 2012 level. In other words, the real economy will have grown by 97% in 2025 as compared to 2012, not by 300%.

Graph 1: Gross Domestic Product (GEL Billion)

Source: National Statistics Office of Georgia, Ministry of Finance

The economic growth rate reached 9.8% in the first quarter. The GDP in constant 2019 prices will reach GEL 74.1 billion if this rate holds for the full year — 105% higher than in 2012. Even then, the gap with the claimed 300% growth remains significant.