Armenia has a higher GDP per capita as compared to Georgia
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VerdictFactCheck concludes that Davit Sakvarelidze’s statement is a LIE.

 

Resume: In accordance with the International Monetary Fund’s data, the GDP of both Georgia and Armenia calculated in nominal USD in the period of 2010-2018 had a trend of constant increase up until 2014 where after it dropped in 2015 but then continued to increase from 2016. Armenia’s GDP per capita was higher as compared to Georgia’s only once, in the year 2010, and this has never reoccurred.

Whilst comparing the GDP per capita of different countries, it is important to take into account the GDP calculated by purchasing power parity (PPP) together with the nominal figures. This approach envisions that in different countries one and the same currency has a different purchasing power depending how wealthy the countries are. In terms of the PPP, the GDP of both Georgia and Armenia constantly increased in 2010-2018 although Armenia’s figure has been lower as compared to Georgia’s in every year.

 

Analysis

On 23 April 2018, former United National Movement member, Davit Sakvarelidze, stated that Armenia had a higher GDP per capita as compared to Georgia which was previously not the case.

In accordance with the International Monetary Fund’s data, Georgia’s nominal GDP per capita constantly increased during the period of 2010-2018 but with a temporary drop in 2014. As a result of the GEL depreciation against the USD, the GDP per capita decreased and dropped to USD 3,762 in 2015. The tendency of growth has resumed since 2016. In accordance with the 2018 prognosis, Georgia’s GDP per capita will reach USD 4,370 at the end of the year.

The change tendency in GDP per capita was similar in Armenia, too. In 2010-2014, Armenia’s GDP showed a constant rise whilst decreasing by USD 360 in 2015 and dropping to USD 3,529. The tendency of growth which started in 2016 will be kept in 2018. Armenia’s GDP per capita will reach USD 4,022 by the end of the year.

Despite the similarity in tendencies, it was only in 2010 when Armenia’s GDP per capita was higher as compared to Georgia’s by USD 171 and hit USD 3,122 within the entire accounting period.

 

Table 1: Georgia’s and Armenia’s GDP per Capita in 2010-2018

Georgia Armenia
GDP per Capita PPP GDP per Capita PPP
2010 2,951 6,704 3,122 6,502
2011 3,711 7,287 3,417 6,803
2012 4,131 7,858 3,576 7,284
2013 4,267 8,239 3,732 7,499
2014 4 428 8,743 3,889 7,756
2015 3,762 9,017 3,529 7,994
2016 3,872 9,322 3,535 8,014
2017 4,099 9,789 3,861 8,613
2018[1] 4,370 10,226 4,022 8,905

Source: International Monetary Fund, World Bank

 

For a fair comparison of the GDP per capita, it is important to take into account the figures calculated in terms of purchasing power parity (PPP) in addition to nominal data. The PPP approach envisions that currencies have different purchasing powers in different countries of the world. Low-income countries have lower prices for goods whilst the currency purchasing power is higher (it is possible to purchase more products with USD 1). In accordance with the International Monetary Fund’s data, the GDP calculated in terms of purchasing power has been constantly increasing in the period of 2010-2018. In 2018, Georgia’s GDP (PPP) will be USD 10,226; that is, USD 1,321 more as compared to Armenia. In addition, if we take the PPP approach into account, Armenia’s GDP per capita has not been higher as compared to Georgia’s in any of the years in the accounting period.

 

[1] Estimated figure

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