Levan Davitashvili: “Trade turnover between Georgia and Armenia amounts to nearly USD 1 billion and is characterised by a growing trend.”
Verdict: FactCheck concludes that Levan Davitashvili’s statement is MOSTLY TRUE.
Trade turnover between Georgia and Armenia amounted to USD 854 million in 2024, marking a 24% decrease as compared to 2023 and a 29% decrease as compared to 2022. However, the figure exceeds the 2019 level by 22%.
Unlike some Central Asian countries, whilst there has not been a surge in exports to Armenia driven by a single dominant product since 2022, the overall increase in re-exports nevertheless reflects the impact of the Russia-Ukraine war. It is also important to note that export growth is not solely attributed to re-exports. Re-exports increased by 43% between 2019 and 2024 whilst local exports grew at a much faster rate of 126%.
Imports to Georgia from Armenia declined sharply in 2024, dropping to an eight-year minimum. The primary reason for this decline was reduced demand for copper ores. However, imports in 2024 are actually double the volume recorded in 2019 when excluding copper ores.
Describing the actual trade turnover in 2024, totalling USD 854 million, as “nearly USD 1 billion” may be considered somewhat of an overstatement. Regarding trends, exports have declined only in comparison to 2023 and have increased relative to all other individual years. Even local exports alone surpassed the 2023 level. Furthermore, data from 2022-2023 may be less relevant for direct comparisons given the effects of the Russia-Ukraine war. The decline as for imports – the second component of foreign trade – is almost entirely attributable to one product – copper ores.
Considering the overall accuracy of the information, the slight exaggeration regarding the turnover figure and the omission of certain trend-related details, FactCheck concludes that Levan Davitashvili’s statement is MOSTLY TRUE.
Analysis
When discussing trade and economic relations between Georgia and Armenia, Levan Davitashvili stated: “Trade turnover between Georgia and Armenia amounts to nearly USD 1 billion and is characterised by a growing trend.”
Armenia is amongst the few countries with which Georgia generally maintains a positive trade balance. Georgia exported goods worth USD 4.3 billion to Armenia and imported USD 3.7 billion worth of goods from Armenia between 2013 and 2024.
The trade turnover constituted USD 854 billion in 2024 (USD 618 million in exports and USD 237 billion in imports). Whilst the aforementioned figure suggests a decline as compared to both 2023 and 2022, it is 22% higher than the figure recorded in 2019. Exports alone exceed the 2022 level and fall short only in comparison to 2023. If we isolate local exports (exports excluding re-exports), they reach a record high.
The Russia-Ukraine war significantly impacted Georgia’s trade structure. Re-exports increased sharply in a short period. Although the scale of growth peaked in Kyrgyzstan and Kazakhstan, the effects of the war are also evident in Armenia and Azerbaijan.
Exports to Armenia increased by 128%, imports by 47% and trade turnover by 78% in 2022 as compared to 2021. Such a significant acceleration can be explained more by geopolitical factors than purely economic contributions which makes data from 2022-2023 less relevant for comparison.
Graph 1: Trade Turnover Between Armenia and Georgia (USD Million)
Source: National Statistics Office of Georgia
Why and on what basis did exports to Armenia rise? The first factor that may come to mind is passenger cars, considering the overall picture; however, this assumption is only partially accurate in this case. Despite passenger cars ranking first amongst the products exported to Armenia, their share decreased to 16% by 2024 whereas in 2019 it exceeded 50%. Moreover, auto exports in monetary terms have surpassed the 2019 level only in 2023 between 2022 and 2024.
Graph 2: Structure of Exports to Armenia (USD Million)
Source: National Statistics Office of Georgia
It is difficult to determine the exact volume by which the war impacted trade turnover. Turnover, both in absolute and percentage terms, increased the most with five countries: Germany, Japan, the United States, Kyrgyzstan and Kazakhstan.[1] The main driver of growth was passenger cars in all five cases. Whilst Georgia did not experience a similar scale of growth with Armenia, the structure of exports still indicates the influence of the war.
Significant growth has been observed in the export of bulldozers, tractors, petroleum products and alcoholic beverages since 2022. Total exports increased by 43% comparing 2024 to 2019 but by 164% when excluding passenger cars. The growth in exports to Armenia since 2022 has not been attributable to a single product, unlike Kyrgyzstan and Kazakhstan. However, the USD 276 million rise in re-exports (in 2023 as compared to 2019) may still be linked to the effects of the Russia-Ukraine war which persisted into 2024 to some extent.
Table 1: Top Ten Export Products to Armenia Ranked by 2023 Value (USD Million)
Passenger Cars, Bulldozers and Excavators, Alcoholic Beverages, Trucks, Petroleum Products, Pharmaceutical Products, Synthetic Woven Fabric, Mineral Waters, Poultry, Tractors and Semi-Trucks
Source: National Statistics Office of Georgia
Bulldozers and petroleum products are both re-exports whereas alcoholic beverages primarily belong to local exports. Despite the overall decline in total exports in 2024, local exports increased from USD 166 million to USD 197 million, marking a record high and exceeding the pre-pandemic period by 126%. Alcoholic beverages rank first with USD 40 million within local exports, followed by mineral waters with USD 12 million in second place and gypsum products with USD 9 million in third.
Graph 3: Local Exports to Armenia (USD Million)[2]
Source: National Statistics Office of Georgia
Although exports decreased as compared to 2023, they still exceed figures of all other individual years whilst imports have fallen to an eight-year low. Import volume fell by 30% as compared to 2023 and by a record 61% as compared to 2022. The main reason for this decline was the reduction in the import of copper ores.
Graph 4: Structure of Imports from Armenia (USD Million)
Source: National Statistics Office of Georgia
Copper ores accounted for an average of 81% of imports from Armenia between 2016 and 2021. The volume of copper ore imports increased in absolute terms but decreased as a share of total imports in 2022. However, both the volume and the share of copper ore imports fell to a 12-year low by 2024.
Copper ores were Georgia’s main export product from 2020 to 2022 with 2022 being a record year when exports exceeded USD 1 billion. Imports also reached a record high that year, totalling USD 775 million. Armenia was the main supplier whilst China was the primary export market. Both imports and exports began to decline simultaneously starting in 2023.
When taking the current year for comparisons, turnover increased slightly by 1.8% in the first quarter as compared to the same period last year – from USD 165 million to USD 168 million. However, this growth concerns only imports, which increased, whilst exports fell by 10% from USD 127 million to USD 114 million. Local exports alone decreased from USD 39 million to USD 36 million.
The difference between USD 854 million and USD 1 billion is not insignificant, yet it may still be permissible to assume that it is “almost” USD 1 billion. The trends in trade turnover are most notable. Whilst export declined as compared to 2023, it has increased significantly as compared to the pre-pandemic period – including a twofold increase in local exports. However, 2022-2023 are less relevant for comparison due to the effects of the war. Unlike exports, imports are at an eight-year low and lag behind the pre-pandemic levels. However, it is worth noting that the import decline is primarily due to the reduction in copper ore imports whilst imports of all other products have tripled as compared to 2019. Considering the overall accuracy of the information, slight exaggerations and the omission of certain details, FactCheck concludes that Levan Davitashvili’s statement is MOSTLY TRUE.
