Georgia's Exports Rise 22.1%: Cars and Petroleum Drive Trade

Georgia's exports grew by 22.1% to $5.42 billion from January through August, according to the National Statistics Office (Geostat). Imports rose by only 3.4% to $12.50 billion during the same period. The trade deficit stands at $7.08 billion. This represents 39.5% of total trade volume, which amounted to $17.93 billion and rose by 8.4%.

Cars and petroleum products drive exports

Motor vehicles are the largest export category: $1.35 billion, or 24.9% of exports. Petroleum products follow with $688.9 million, or 12.7%. Precious metal ores account for $403.1 million, or 7.4%.

The main buyers are Kyrgyzstan at 577.6 million U.S. dollars, China at 543.7 million, and Russia at 500.7 million. The ten largest markets account for 68.8% of exports.

Analysts at TBC Capital estimate that petroleum products contribute 14.2 percentage points to export growth. That represents 64% of the total increase. Without this category, the increase would be significantly smaller.

On the import side, automobiles also lead the way: $2.36 billion, or 18.9% of imports. They are followed by petroleum products at $1.16 billion and pharmaceuticals at $468.4 million. The most important suppliers are Turkey at 1.92 billion U.S. dollars, Russia at 1.53 billion, and the U.S. at 1.51 billion.

Growth is slowing

According to Geostat, real gross domestic product grew by 6.9% in the second quarter. In the first quarter, the figure was 9.0%. For the first half of the year, TBC Capital reports 7.8%, down from 8.6% in the same period last year.

Georgia owes approximately 96% of its real growth to the services sector. According to TBC Capital’s calculations, the ICT sector alone accounts for “nearly 29% of real GDP growth”—more than twice as much as the next-largest sector. Construction and agriculture, on the other hand, acted as drag on growth. Both sectors made negative contributions.

Remittances are showing weaker growth. Instant money transfers fell by 8.2% in August compared to the same month last year. Transfers from Russia dropped by 88% from July to $5.1 million. TBC Capital attributes this to sanctions against the payment service Zolotaya Korona.

What this means for German companies

Georgia imported $12.5 billion worth of goods in eight months, primarily vehicles, fuels, and pharmaceuticals. German automotive suppliers and pharmaceutical manufacturers are finding a market there that is growing by more than 6% despite slower overall growth. Suppliers should review payment methods and intermediaries: Russia’s share of trade and remittances remains high, and sanctions compliance requires proper documentation. Investors find the strongest growth driver in the ICT sector.

Sources: Geostat (EN), TBC Capital via Georgia Today (EN), Sova News on Geostat (EN)

SK, Frankfurt