Irakli Kobakhidze: “Economic growth averaged 9.7% from 2021 to 2023 and the 2024 figure has already surpassed projections.”
Verdict: FactCheck concludes that Irakli Kobakhidze’s statement is MOSTLY TRUE.
The Georgian economy grew by 10.6%, 11% and 7.5% in 2021, 2022 and 2023, respectively, resulting in a total growth of 32% and an average annual growth of 9.7% over these three years.
The GDP growth rate reached 9.3% in the January-May period of 2024, significantly exceeding the projections made by the Georgian government, International Monetary Fund and other international financial institutes.
The high economic growth in the short term can be attributed to both objective and subjective reasons. In particular, the double-digit growth in 2021 was influenced by the base year effect (the economy contracted by 6.3% in 2020), whilst the increase in monetary flows from Russia, as well as the general impacts of Russia’s invasion of Ukraine affected the data of 2022. Despite highlighting accurate data, the Prime Minister omits crucial additional information and explanations that would have provided full clarity. Considering all of the above, FactCheck concludes that Irakli Kobakhidze’s statement is MOSTLY TRUE.
Analysis
Prime Minister Irakli Kobakhidze presented the annual report at the Parliament on 28 June, discussing various topics, including economic growth. He highlighted: “I would like to remind you that economic growth averaged 9.7% from 2021 to 2023, whereas the 2024 figure has already surpassed the International Monetary Fund projections. Although the institute initially projected a growth of 4.8%, the current figure amounts to 9.3%, which is a five-month average.”
The Georgian economy experienced a double-digit expansion of 10.6% in 2021, marking the first time it achieved such growth since 2007, following a decline in 2020. Many countries worldwide also witnessed record growth rates, with the global economy expanding by 6.3%, the highest figure since 1973, following the lifting of the pandemic-related regulations. In this general context, the growth of the Georgian economy was not an isolated occurrence.
Whilst the global growth rate of the economy returned to its pre-pandemic trajectory in 2022, the Georgian economy experienced an even higher expansion of 11%. Notably, a five-fold increase in money transfers from Russia as compared to 2021, surpassing USD 2 billion, significantly contributed to the aforementioned growth.
The growth rate of the economy amounted to 7.5% in 2023. The highest growth rate was 6.1%, recorded in 2018 during the pre-pandemic period of 2013-2019 under the Georgian Dream political party’s governance.
Overall, the Georgian economy expanded by 32% with an annual average growth rate of 9.7% from 2021 to 2023.
Graph 1: GDP Growth Rate
Source: National Statistics Office of Georgia
The GDP growth rate reached 9.3% in the January-May period of 2024, significantly exceeding the projections made by the Georgian government, International Monetary Fund and other international financial institutes.
The planned growth of the 2024 budget was set to 5.2%, whilst the National Bank of Georgia took a more conservative approach, projecting a growth rate of 4.8%. Although the World Bank also initially projected a growth rate of 4.8% in January, the institution later revised this figure to 5.2% in April. Furthermore, the International Monetary Fund initially projected an expansion of 4.8%, but later increased it to 5.7%.
Table 1: 2024 GDP Growth Rate Projections
Source: The organisations and institutions mentioned in the table
The government decided to increase the budget expenditure by GEL 519 million due to the higher-than-projected growth rate of the economy and published the potential distribution of this additional wealth: GEL 115 million will be added to the Ministry of Health, GEL 100 million to the Ministry of Defence and GEL 80 million to the Ministry of Education. These changes must be approved by Parliament.
The data highlighted by the Prime Minister are accurate. The average annual economic growth rate amounted to 9.7% from 2021 to 2023, whilst the GDP growth rate reached 9.3% in the January-May period of 2024, significantly exceeding the projections made by the Georgian government, International Monetary Fund and other international financial institutes. Despite presenting accurate figures, the Prime Minister’s statement still lacked full clarity, particularly regarding the underlying factors of the double-digit economic growth rates in 2021 and 2022. Notably, the 2021 figure was influenced by the base year effect, whereas the increase in monetary flows from Russia, as well as the general impacts of Russia’s invasion of Ukraine affected the data of 2022.
Despite highlighting accurate data, the Prime Minister omits crucial additional information and explanations that would have provided full clarity. Considering all of the above, FactCheck concludes that Irakli Kobakhidze’s statement is MOSTLY TRUE.
