Georgia's financial sector: Foreign investments drop by 64%
FDI decrease in Georgia
Foreign direct investment in Georgia in the first quarter of this year decreased to $201.4 million, marking a year-on-year decline of 64.4 percent. The financial sector is particularly affected, with this quarter’s figure being the lowest since the pandemic period (2020-2021). It is notable that in the first quarters of the last two years, the volume of foreign direct investment exceeded half a billion dollars.
Investments from various countries are distributed as follows:
- Turkey: $42.4 million (21%)
- Czech Republic: $41.5 million (20.6%)
- USA: $33.7 million (16.7%)
- Netherlands: $32.3 million (16%)
- Marshall Islands (offshores): $22.3 million (11%)
- The largest investments were made in the energy sector, amounting to $78.7 million (39.1%). The trade sector follows with $39.5 million (19.6%), and the transport sector takes the third position with $38.8 million (19.3%).
It’s worth noting that the last negative figure in the financial sector was recorded in the second quarter of 2019 and the fourth quarter of 2016.
Foreign Direct Investment (FDI) refers to investments made by a foreign enterprise in a country’s production or business through purchasing a company or expanding existing business operations. Apart from FDI, there are also portfolio investments, which involve passive investments in securities of another country, such as stocks and bonds.
Foreign investments play a crucial role in achieving economic growth for a country. They increase the capital stock, leading to higher productivity and employment levels. Additionally, foreign investments enable developing countries to access and utilize cutting-edge technologies developed and used in economically advanced countries.
FDI decrease in Georgia
