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Paata Kvizhinadze, member of the faction Georgia Dream, was among those delivering speeches in the debates on the economy held in the Parliament of Georgia on 1 October 2013. In his speech, he made the following statement with regard to GDP growth:  “As shown in the data from the first quarter of 2013, growth was observed in all real sectors but construction. For instance:  financial intermediation services indirectly measured has seen an increase of 19.5%, communication – 7.9%, trade – 6.8%, agriculture – 6.7%, hunting, forestry and fishing – 6.7%, financial intermediation – 6.5%, mining and quarrying – 5.9%, real estate, renting and business activities – 5.2% and manufacturing – 5.1%. As for construction, it represents virtually the only sector of the economy seeing a decrease.”

FactCheck

inquired about the accuracy of the statistical data given by the MP.

Paata Kvizhinadze was referring to statistical data published on 19 June 2013 by GeoStat which shows preliminary data

on GDP of Georgia for the first quarter of 2013 (adjusted data will be published on 15 November).

In line with the preliminary data of GeoStat, the real GDP growth, as compared to the relevant quarter of the previous year, is as follows (data is analysed according to sectors):  financial intermediation services indirectly measured grew by 19.5%, communication – 7.9%, trade – 6.8%, agriculture, hunting, forestry and fishing – 6.7%, financial intermediation – 6.5%, mining and quarrying – 5.9%, real estate, renting and business activities – 5.2% and manufacturing – 5.1%.

Negative growth rates were observed in the following sectors:  construction (-9%), electricity, gas and water supply (-1.7%), transport (-0.6%), private households employing domestic staff and undifferentiated production activities of households for own use (-6.4%).

In order to form a comprehensive analysis on the matter, we further inquired about the dynamics of growth rates. In particular we examined what degree of growth was observed in the abovementioned sectors in the first quarter of 2012 as compared to the corresponding period of 2011. It is to be noted that in setting the first quarter of 2013 against the corresponding period of 2012, we observe a deceleration of growth rates (deceleration of growth rates implies that growth rates of certain sectors are not expressed by negative figures but still show a decline relative to growth rates of the previous year) in seven sectors (

manufacturing, hotels and restaurants, financial intermediation, imputed rent of owner occupied dwellings, public administration, education, and other community, social and personal service activities).

Ultimately, decelerated growth rates in the listed sectors and negative rates of the abovementioned four sectors result in the decline of the real GDP growth rate.  In the first quarter of 2012 real GDP growth rate amounted to 6.7% while in the corresponding period of 2013 same indicator was at 2.4%.

Conclusion

Our inquiry about the accuracy of Paata Kvizhinadze’s statement revealed that all the sectors mentioned by the MP had indeed seen an increase of precisely the same rates as indicated in the statement. In the first quarter of 2013 growth was observed in 15 sectors of the economy while negative tendencies were present in four. Paata Kvizhinadze states that except for construction, “virtually” no other sector had seen a decrease. By using the word “virtually,” he insinuates that construction is not the only sector experiencing a decrease but he avoids mentioning others.

It should also be kept in mind that a decrease of growth rates was observed in seven sectors of the economy which resulted in the decline of GDP growth rates. Although Paata Kvizhinadze correctly indicates the figures, he disregards the drop in the GDP growth rates and merely overlooks this momentous aspect. Due to these circumstances we deem the MP’s statement to be inaccurate and lacking significant contextual details. Accordingly Paata Kvizhinadze’s statement:  “As shown in the data from the first quarter of 2013, growth was observed in all real sectors but construction. For instance:  financial intermediation services indirectly measured has seen an increase of 19.5%, communication – 7.9%, trade – 6.8%, agriculture – 6.7%, hunting, forestry and fishing – 6.7%, financial intermediation – 6.5%, mining and quarrying – 5.9%, real estate, renting and business activities – 5.2% and manufacturing – 5.1%. As for construction, it represents virtually the only sector of the economy seeing a decrease,” is HALF TRUE.

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