Giorgi Kvirikashvili spoke about the positive changes in the agricultural sector.
the Minister of Economy and Sustainable Development of Georgia, Giorgi Kvirikashvili, stated: “In the 2013 GDP, the share of the domestic product, created by the agricultural industry, rose by GEL 234 million. The agricultural turnover increased by GEL 374 million and grew by 13.3%. The turnover of agricultural product in the first quarter of 2014 rose by 52%, as compared to the first quarter of the last year, and the output in agricultural production also increased by 61%. Foreign direct investment grew by 100% in 2013 as compared to 2012 and amounted to USD 32 million.”
FactChecktook interest in Giorgi Kvirikashvili’s statement and verified its accuracy.
According to the National Statistics Office’s preliminary data, the share of agriculture, hunting and forestry, fishery and aquaculture in the GDP is equal to GEL 2,168.2 million, surpassing the last year’s index of GEL 1,933 million by GEL 234.9 million. Thus, this aforementioned sector has increased by 12% in 2013 as compared to the previous year.
The biggest share (51%) of the aforementioned sector’s gross output comprises animal husbandry and horticulture and accounts for a 41% share whilst agricultural service, forestry and wood production and fishery-aquaculture share a lesser amount of the gross agricultural output (See Graph 1).
The output of agricultural products in 2013 was GEL 3,180 million which is 13.3% more as compared to the previous year’s index. As for the first quarter of 2014, agricultural output amounted to GEL 726 million which is 2% higher than the respective period’s index of the last year (GEL 712 million). A relatively high growth of 7.4% was seen in the gross agricultural output. Agribusiness output comprises both agricultural product output and the output of the production obtained from processing agricultural products. The latter includes the production of wheat flour, bread, pastry and other confections, meat, dairy produce, alcoholic drinks and other foodstuffs.
Kvirikashvili was talking about the nominal growth of the agricultural sector. Nominal growth may be caused by the growing prices of agricultural product and/or the growth in output rate. To find out whether or not there was a real growth in the agricultural sector, it is necessary to have a look at the real indicators. According to the data of the National Statistics Office, the share of agriculture in the GDP with 2003 constant prices was GEL 1,505.6 million in 2013, surpassing the last year’s relative index by GEL 134.4 million. This means that real growth in agriculture indeed took place although the nominal growth was partly caused by growing prices.
When making his statement, Giorgi Kvirikashvili was not concrete in his details but most likely referred to foreign direct investment (FDI) in agriculture and not the total amount of foreign direct investment in the country. According to the preliminary indicators by the National Statistics Office, the total amount of the FDI in Georgia amounted to USD 914 million in 2013. The share of agriculture in investments is 3.5% and equals USD 32 million which is twice as high as the previous year’s index. The dynamics of the FDI, made in agriculture and its share in the total investments since 2007, is shown in the graph below. As can be seen, the share of investments made in agriculture fluctuated from 0.5% to 3.5%. Based upon these data, we can conclude that agriculture is a less attractive sector for foreign investments.
Approximately 70% of the FDI made in Georgia in 2013 are in the following sectors: energy – USD 198 million, finance – USD 170 million, transportation and communication – USD 138 million and the processing industry – USD 124 million.
Conclusion
The share of the agriculture, hunting and forestry, fishery and aquaculture sector in Georgia’s GDP amounted to GEL 2,168 million in 2013 which is GEL 234.9 million more as compared to the previous year’s index. Agricultural product output amounted to GEL 3,180 million which is 13.3% more than the previous year’s index. As for the first quarter of 2014, agricultural product output amounted to GEL 726 million in this period which is 2% more as compared to the previous year’s respective index at GEL 712 million. The total amount of the FDI in Georgia amounted to USD 914 million in 2013. The share of agriculture in investments is 3.5% and equals USD 32 million which is twice as much as the same index from 2012.
Thus, we conclude that Giorgi Kvirikashvili’s statement is MOSTLY TRUE.
