Georgia’s economy has a good chance of exceeding an official 4 percent growth projection in 2017 thanks to private sector developments and the government spending on infrastructure projects, the country’s economy minister said on Wednesday.
After slowing to 2.2 percent last year from 2.9 percent in 2015, the economy of the former Soviet republic is now recovering from a fall in exports and a depreciation of currencies of its main trading partners.
“I think that economic growth will exceed the projected 4 percent by the end of this year,” Giorgi Gakharia said in an interview with Reuters.
The economy in Georgia, through which pipelines carry Caspian oil and gas to Europe, has already picked up to 4.2 percent in the first four months this year after expanding by 2.8 percent in the same period a year earlier thanks to higher exports and more remittances from abroad.
“Private sector is developing well and the government’s capital spending will increase,” Gakharia said.
Gakharia also told Reuters he expected foreign direct investment (FDI) to be slightly up this year from $1.645 billion in 2016.
Talking about FDI, Gakharia said it was one of the government’s main tasks to attract investment from abroad amid waning investments from the country’s major investor – BP , which had almost completed a pipeline construction project in Georgia.
Azerbaijan, which acted as Georgia’s main investor, helped to push FDI 3.7 percent higher year-on-year to $403.3 million in the first quarter, with the transport sector benefiting the most from the foreign influx.
Gakharia also said that the government has for now considered suspending plans to sell stakes in major state-owned firms due to “unfavourable market conditions”.
Such conditions altered the government’s earlier plan to carry out initial public offerings abroad, offering 25 percent stakes in state-owned firms Oil and Gas Corporation (GOGC) and the country’s railways monopoly Georgia’s Railway, Gakharia said.
Georgia’s Railway, which is working on developing new routes such as the Baku-Tbilisi-Kars project for a corridor from the Caspian Sea through Azerbaijan and Georgia to Turkey, had already postponed a London IPO listing due to volatile markets in 2012.