Georgian Dream: “Bidzina Ivanishvili expanded the economy from GEL 28 billion to GEL 90 billion over the past 12 years.”

Verdict: FactCheck concludes that the Georgian Dream’s statement is HALF TRUE.

The Georgian economy constituted GEL 27.9 billion in nominal terms in 2012 and grew to GEL 80.9 billion in 2023, with a projected value of GEL 90.9 billion for 2024, which exceeds the 2012 level by 220%. This growth was accompanied by inflationary trends (except for the deflation – negative inflation – marked in 2013). Consumer prices rose by 66% in total from 2013 to 2024, resulting in a real economic growth of 87%.
Nominal income alone provides limited value without accounting for purchasing power. In theory, monetary revenues could increase whilst its purchasing power declines. Whilst the economy has not contracted under the governance of the Georgian Dream (with a single downturn observed in 2020), real growth significantly lags behind nominal growth. The GDP grew not from GEL 28 billion to GEL 90 billion, but rather from GEL 28 billion to GEL 50 billion when adjusted for 2012 fixed prices.
The gap between the nominal and real growth is substantial, as well as the gap in its implications. Additionally, attributing a specific event solely to Bidzina Ivanishvili, who holds no official position, may hold some validity but is not entirely accurate, even acknowledging the considerable influence he wields – a fact that the Georgian Dream does not hide. Considering all the above, FactCheck concludes that the Georgian Dream’s statement is HALF TRUE.

Analysis

The Georgian Dream issued a statement on 8 January, addressing the sanctions imposed on Bidzina Ivanishvili and linking them to the nominal economic growth, alongside other factors: “[Bidzina Ivanishvili] expanded the economy from GEL 28 billion to GEL 90 billion over the past 12 years.”

Bidzina Ivanishvili officially served as Prime Minister for 13 months, from October 2012 to November 2013. He returned to the politics as Chairman of the Georgian Dream in May 2018, holding this position for two years and eight months. He was named Honorary Chairman of the Georgian Dream on 30 December 2023. Although Bidzina Ivanishvili has not held the role of Prime Minister for over 11 years, his influence is acknowledged both within the ruling party, the opposition and internationally. Thus, attributing events from 2014 to 2024 directly to Bidzina Ivanishvili may not be entirely accurate, but it is arguably acceptable given the prevailing political environment.

Has the economy really expanded from GEL 28 billion to GEL 90 billion during the governance of the Georgian Dream? The economy was valued at GEL 28 billion in 2012 and grew to GEL 18 billion in 2023 according to GeoStat, whilst the projected value for 2024 reached GEL 91 billion, as per the Ministry of Finance’s projections. Whilst the nominal data is accurate, the real growth of the economy over the 12-year period does not amount to 220%. In reality, the total real economic growth rate was 87% – 2.5 times less than the nominal increase. The primary factor behind the aforementioned gap is inflation which was not addressed in the Georgian Dream’s statement. The current economy would be valued GEL 50 billion, if consumer prices had remained constant since 2012.

Graph 1: Georgian GDP (GEL Billion)

GDP in Current Prices GDP in 2012 Prices

Source: National Statistics Office of Georgia, Ministry of Finance

Consumer prices increased by a total of 66% from 2013 to 2024, implying that the same products and services that cost GEL 100 in 2012 would require GEL 166 in 2024. Similarly, the GDP grew not from GEL 27.9 billion to GEL 90.9 billion, but rather from GEL 46.3 billion to GEL 90.9 billion between 2012-2024 when adjusted for 2024 prices.

Without further clarification, citing nominal data – although accurate – can give the impression that the real quality of life has increased three-fold, or even by 220%. This does not reflect the true reality, as the real total growth rate of the economy over this period was significantly less, constituting 87%. The gap between the nominal and real growth is substantial, as well as the gap in its implications. Additionally, attributing a specific event solely to Bidzina Ivanishvili, who holds no official position, may hold some validity but is not entirely accurate, even acknowledging the considerable influence he wields – a fact that the Georgian Dream does not hide. Considering all the above, FactCheck concludes that the Georgian Dream’s statement is HALF TRUE.