Irakli Gharibashvili: “In total, export in January-July increased by almost 37% and is over USD 3 billion. Trade turnover in January-July amounted to USD 10.2 billion which is 35% more as compared to the previous year.”
Verdict: FactCheck concludes that Irakli Gharibashvili’s statement is TRUE.
Resume: The Prime Minister’s figures are accurate. According to the data of the first seven months of 2022, the export of goods has indeed increased substantially. The 36.3% growth in export is unprecedented and export figures are much higher even as compared to the pre-pandemic data. Trade turnover in January-July 2022 amounted to USD 10.2 billion which is a 35% growth as compared to the previous year and this growth, similar to the growth in export, is markedly outstanding as compared to the dynamic of the previous years. The trade deficit increased by nearly USD 1 billion, although the percentage share of export in trade turnover has expanded slightly.
The export of local produce has also increased considerably which is a more important and noteworthy indicator in relation to GDP growth. In January-June 2022, local export increased by 36.3% which equals a USD 501 million growth. Re-export, as such, increased by USD 171 million. It is obvious that export growth happened at the expense of the growth of local export. Of note is that this indicator has not decreased amid the pandemic and, therefore, growth is substantial when excluding the base effect as well. Therefore, both in terms of content and context, Irakli Gharibashvili’s statement is true. At the same time, the structure of the local produce export has not changed substantially, still remains weak and mostly consists of raw goods with little added value.
Analysis:
The Prime Minister of Georgia, Irakli Gharibashvili, stated the following about foreign trade statistics at a session of the Government of Georgia: “In total, export in January-July increased by almost 37% and is over USD 3 billion. Trade turnover in January-July amounted to USD 10.2 billion which is 35% more as compared to the previous year.”
According to the first seven months of 2022, the export of goods has indeed increased substantially. Growth in July 2022 as compared to July 2021 is 40% whilst the total export value for the first seven months increased by USD 826 million which is 36.3%. This is an unprecedented growth and export figures sharply exceed even the pre-pandemic indicators. In 2019, the value of export of the first seven months was USD 2.1 billion whilst it was 1.8 billion in 2018. Export increased by 46.6% as compared to 2019.
Table 1: Dynamic of Export of Goods in January-February 2013-022, USD Million
Source: National Statistics Office of Georgia
Trade turnover is the total sum of the export and the import of goods. This figure reached USD 10.19 billion in January-July 2022 which constitutes a 35% growth as compared to the previous year. Similar to export, this growth is markedly outstanding as compared to the dynamics of the previous year. The trade deficit increased by nearly USD 1 billion, although the percentage share of export in the trade turnover has expanded slightly.
Graph 1: Trade Turnover and Trade Deficit in 2013-2022, USD Million
Source: National Statistics Office of Georgia
Generally, when speaking about export of goods, it is important to analyse the export of local produce; that is, the volume and the structure of export without re-export because this what precipitates economic growth. In the case of re-export, both export and import figures rise whilst the difference between the export and the import values of re-export is a country’s profit.
In regard to the export of local produce, data are available only to the end of the month of June. In January-June 2022, local export increased by 36.3% which equals a USD 501 million growth. Re-export, as such, increased by USD 171 million. It is obvious that export growth happened at the expense of the growth of local export. Of note is that this indicator has not decreased amid the pandemic and, therefore, growth is substantial beyond the base effect as well. At the same time, the structure of local produce export has not changed substantially, still remains weak and mostly consists of raw goods with little added value (copper ores, ferroalloys, mineral waters, wines, fertilisers).
Table 2: Local Export Produce Dynamic in 2013-2022, USD Million
Source: National Statistics Office of Georgia
