Speaking to the media after meeting representatives of the World Bank, the Prime Minister of Georgia stated: “In 2004, Georgia ranked 116^th by its GDP per capita indicator and moved up to the 115^th

position in 2012. These figures present a clear picture of our supposed ‘growth’ in the region. The talks about the alleged doubling of the state economy and claims about Georgia becoming the leader in the region are utterly exaggerated and deceitful.”

FactCheck

took interest in the PM’s statement and set out to verify its accuracy.

In 2003 the real GDP of Georgia amounted to GEL 8.6 billion while in 2012 its volume reached GEL 14.5 billion. Therefore, the volume of the real GDP roughly saw a 1.7-fold increase in the period 2003-2012. (The real GDP measure reflects the value of all goods and services produced in the country expressed in constant prices [in our case, in the prices of 2003] in order to exclude price fluctuation, in other words, an inflation/deflation factor.) Therefore, the real GDP shows the actual growth in the volume of the final goods produced in the country.

As for the nominal GDP, it totalled GEL 8.6 billion in 2003 and rose to GEL 26.2 billion in 2012. Therefore, nominal GDP saw roughly a three-fold growth. (Nominal GDP reflects the value of the final goods and services produced in the country expressed in current prices.)

Despite the three-fold growth of the nominal GDP, the application of the real GDP measurement is more justified as this indicator excludes the fluctuation in prices (inflation). Consequently, the Prime Minister’s statement claiming that the talks about the doubling of the economy are “utterly exaggerated and deceitful” is undeniably false inasmuch as the Georgian economy grew 1.7-fold over the years 2003-2012.

As for the matter of holding leading positions in the region, based upon certain criteria Georgia can indeed be considered as a regional leader. Among these, for instance, is the Doing Business ranking in whose report of 2014 Georgia moved from the ninth position up to the eighth while neighbouring Armenia ranked 37^th and neighbouring Azerbaijan only 70^th.

However, based upon the major economic indicators, namely, the GDP growth rate and GDP per capita, in line with the data of the World Bank, Georgia falls behind the other countries of the South Caucasus region. The average GDP growth rate of Azerbaijan for the years 2004-2012 amounts to about 13.7% and Armenia – 9.7% while the indicator for Georgia equals 6.1%.

In 2004, Georgia held the 117^thposition in the world by its GDP per capita indicator (USD 3,224 PPP) and rose to the 104^thposition in 2012 (with USD 5,806 PPP). Armenia occupied the 110^th place in the world in 2004 by its GDP per capita indicator (USD 3,532 PPP) and moved up to the 93^rdplace in 2012 (with USD 8,417 PPP). Azerbaijan ranked 112^th in 2004(with USD 3,482 PPP) and advanced to 82^nd

in 2012 (with USD 10,125 PPP).

We also compared Georgia’s principal economic indicators to those of the former Soviet republics (exclusive of Russia and the Baltic countries).

As can be gathered from the table, based upon the GDP per capita indicator, Georgia is surpassed by more than half of the countries listed above while its GDP growth rate exceeds the indicators of only three countries.

Conclusion In the course of verifying the facts, FactCheck

established that the economy of Georgia has certainly not doubled and the real GDP of 2012 shows only a 1.7-fold increase relative to the indicator of 2003. The Prime Minister’s assertion, however, describing the talks about the doubling of the state economy as “utterly exaggerated and deceitful,” is inaccurate as the Georgian economy clearly saw a notable growth in the period under question. The Prime Minister justly states that Georgia has not become the leader in the region by its economic indicators.

As for Georgia’s ranking in the world based upon the GDP per capita indicators, it occupied the 117^th position in 2004 which is fairly close to the figure indicated by the PM although Georgia was ranked 104^th and not 115^th

in 2012 as claimed in the statement.

Consequently, we conclude that Irakli Gharibashvili’s statement: “In 2004, Georgia ranked 116th by its GDP per capita indicator and moved up to the 115th position in 2012. These figures present a clear picture of our supposed ‘growth’ in the region. The talks about the alleged doubling of the state economy and claims about Georgia becoming the leader in the region are utterly exaggerated and deceitful,” is HALF TRUE.