Affairs of Georgia 2020 Economic Growth Economic Growth - PowerPoint PPT Presentation

Ministry of Foreign Affairs of Georgia 2020

Economic Growth Economic Growth Components of GDP 2018 Industry 24.8% Others 33.9% Infrastructure 12.9% Agriculture 6.8% Trade 12.4% Transport & telecommunication 9.2% GDP per capita (PPP)

External Trade External Trade Change in imports in 2019 Change in exports in 2019 -0.8% +12.4% Share of Major Commodity Groups by Imports in 2019 Share of Major Commodity Groups by Exports in 2019 Petroleum 8.40% Motor cars Motor cars 18.20% Copper ores 7.20% 32.80% Copper ores Ferro-alloys Medicaments 6.70% Wine Petroleum Gases Medicaments 3.90% Telephone sets Mineral waters 17.30% 3.60% Cigarettes Spirituous beverages 63.70% 2.30% Wheat and Meslin Nitrogenous Fertilizers 1.20% New Tires 1.20% 1.80% Gold 1.90% 8.00% Electrical Energy 1.00% Hazelnuts & Other Nuts 2.50% 0.90% Others 5.90% 4.60% 3.40% Others 3.50% 3

Foreign Direct Investments Foreign Direct Investments FDIs and Reinvestments 2016 - 2019 (1-3Q) 2500 1962 Million (USD) 2000 1650 1500 1265 Investements 909 1000 Earning Reinvestments 616.6 437.2 435.8 311 500 0 2016 2017 2018 2019 (1-3 Q)

Tourism and Remittances Tourism and Remittances Money Transfers Million (USD) 1,733.3 2,000.0 1,579.7 1,440.4 1,387.3 1,153.4 1,080.0 1,000.0 0.0 2014 2015 2016 2017 2018 2019 Inflow

Investment Sectors HOSPITALITY & REAL ESTATE LOGISTICS BUSINESS PROCESS ENERGY MANUFACTURING OUTSOURCING

Business Friendly Environment Economic Corruption Doing Business Freedom Perceptions N 7 N 16 N 44 Up from #112 in 2005 Up from #99 in 2005 Up from #130 in 2005 Georgia is one of Alongside Majority of the leading recognitions as Georgia’s reforms countries in the are oriented on the top reformer world in terms of in the world, the development starting a Georgia is the of free, open and business, dealing leader in the transparent, with bureaucracy wider region in private-sector and the number driven market terms of fighting --- --- of procedures with corruption. economy required to launch Corruption index --- and operate an 8 th Place in the is lower than in enterprise number of EU European Region (44 countries) states.

Investment Friendly Tax Environment  Only 6 fl flat taxes today  No payroll tax or r socia ial contribution  No wealth tax  Foreign-source in income of f in individuals fu fully exempted  DTA wit ith 52 countries  Since 1 Ja January ry 2017 - only dis istributed profits are taxed Streamlined Tax Administration TAXES  Robust e-filing and e-payment systems  VAT – 18%  Electronic VAT Invoices  Personal Income Tax – 20%  Risk Based Tax Audit  Property Tax – Up to 1%   Advance Ruling Corporate Profit Tax – 15%  Import Tax – 0%, 5%, 12%  Accelerated Services  Excise Tax – Depends on  Average customs clearance procedures Goods takes just 20 minutes

HOSPITALITY & REAL ESTATE INVESTMENT OPPORTUNITIES „ SUN- BEACH” WINTER SKI FOUR SEASON GAMBLING MEDICAL & WELLNESS RESORTS RESORTS RESORTS RESORTS Winter resorts with wide range of Majestic landscapes Unique water and mud resources Development of large-scale and all- inclusive seaside activities including freeride and allow four season provide opportunities for SPA resort integrated casino complex Mixed resorts heli- skiing tourism activities development LOCATIONS Batumi Mestia Tskhaltubo Batumi Gonio Mestia Anaklia Bakuriani Akhtala Anaklia Bakurian Tbilisi Goderdzi Borjomi Kobuleti i Tskaltubo Kazbegi, Gudauri Abastumani, Other Black Bakuriani etc . Sea locations etc . Goderdzi Sighnaghi Kobuleti, etc.

Hosp spitali lity & Tourism Trends by Regions Top Countries By International Arrivals In 2018 Tourism sm made up 7.6 .6% of f total l GDP in in 2018 5% 6% 19% Accommodation Unit its by Regio ion 24% (as of November 2019) 22% Number of Nu of Region Quantity Number of Nu of Beds Rooms 24% Georgia Ge 2,480 37,255 90,793 Azerbaijan Russia Armenia Turkey Iran Other Aja jara 480 10,878 26,519 Guria Gu 110 1,804 4,772 Tbili ilisi 492 10,244 23,072 Im Imereti 188 2,544 6,118 Kakh akheti 230 1,915 4,579 Mts tskh kheta-Mtianeti 169 2,042 5,314 Ra Racha-Lechkhumi, Lo Lower 72 509 1,481 Svaneti Sa Samegrelo-Upper 484 2,940 7,406 Svaneti Sa Samtskh khe-Javakheti 212 3,941 10,397 Lower Kar artli li 17 239 562 Inner Kar In artli li 26 199 573 Source: Georgian National Tourism Administration

Manufacturing Sector Growing regional market and various import substitution opportunities Average monthly salary in manufacturing industry amounts to USD 360 (2018) Free Trade Agreements with 2.3 billion market - EU, Turkey, China, EFTA, CIS countries and UK Standard cost for 1 kWh is -7 USD cents for 30-110 kV high voltage electricity 4 Free Industrial Zones (FIZ) - In FIZ, businesses are exempt from all taxes except Personal Income Tax (20%)

Young, skilled & competitively priced labor force • All • Around 60 ll IL ILO core conventio ions are ratif ifie ied by by Georgia ia 60% of of young popula lation and 40 40% of of overall ll popula latio ion know Engli lish Average Monthly Sala lary Unemployment Rate 12.7 .7% 422 U USD Young la labor Fle lexi xible Labor Code 56% 56% of f unemployed population are in in 20-40 age category ry

Promoting Transit Hub Rapid development of of the framework in infrastructure To ensure Georgia’s spatial development, the GOG is accelerating development & modernization of infrastructure projects. The Government is going to invest 5 billion USD till 2023 to accelerate infrastructural projects. Main Prio riorities: • Finalization of construction of the main highways connecting East and West - 65% of construction is completed • Modernization of regional Secondary road network • Modernization and capacity development of Georgian railway lines network – will be completed by the end of 20 21 • Further expansion and development of port infrastructure via planned construction of new multimodal terminals in Poti and Batumi Sea Ports and New Deep Sea Port Anaklia There are 1609 bridges and 32 tunnels in Georgia

Overview of Georgia’s Logistics Sector Georgia-Regional Logistics Hub • Leveraging its location, Georgia’s transport economy can benefit from large addressable transit flows, growing economies and landlocked resources • Ports are cost-competitive vs. alternative routes • Georgia’s existing transport economy is transit based • Upgrading regional transport infrastructure • Alternative route through Georgia takes 7-9 days from China to Europe instead of 45 days of traditional route • In 2019 Georgian airports served 5,209,505 passengers which is 3.5% more than in 2018 and 28% more than in 2017 In International l Airports Sea Port rt Roads and Railw ilway Tbilisi Tb i In International Air irport (T (TAV) Poti ti Sea Sea Port rt (A (APM Ter Termin inals ls) Georgian Rai ailway - Total Length: : 2,0 2,083.9 km Ba Batumi In International Air irport (T (TAV) Batu atumi i Sea Sea Port rt (B (BIH IH) Roa oad - Total L Length th: : 2 20,329 k km Kulev evi i Ter Termin inal (SO (SOCAR) Kut utaisi In International Air irport (U (UAG) Sups Su psa Ter Termin inal (B (BP) Plan anned Plan anned Plan anned • Georgian Ra Railw ilway Modernization Tbilisi Tb i In International Air irport • New Deep Se Sea Port rt-Anaklia ia Pro roje ject • In International Carg rgo te terminal • New te terminal in in Poti ti Se Sea Port rt • Tb Tbilisi i Ra Railw ilway By Bypass • New te terminal in in Ba Batumi Se Sea Port rt • East st-west high ighway Kut utaisi In International Air irport • Re Rehabilitatio ion of f exis isting in infr frastructure • Apr pron extension • Carg rgo Te Terminal • Development of f th the lo logi gistic ce centers (T (Tbil ilisi and Kut utaisi)

Large-Scale le In Infrastructure Projects Logistics Centre Tbilisi • First capable Logistics Hub for East Georgia as well as South Caucasus Region • Direct access to Baku-Tbilisi-Kars railway line • Implementation of a Rail-Road Container Terminal (about 8 ha) • Area size: about 53 ha • Overall investment: USD 80 million Logistics Centre Kutaisi • First capable Logistics Hub for West Georgia • Area size: about 46 ha • Excellent location adjacent to Kutaisi International Airport • Overall investment: USD 73 million • Optional further implementation of a Rail-Road Container Terminal (about 2.5 ha) Note: currently the concept of development of modern logistics centres in Georgia is under revision, after which the investment attraction process will be resumed

Development of New Transit it Routes and Corridors Tra rans-Caspian In International l Tra ransport R Route – The best s shortcut t to E Europe Persian G Gulf lf-Bla lack S Sea corridor Founding co countries: Kazakhstan, Azerbaijan, Georgia Parti rticipating co countries: Iran, Azerbaijan, Armenia, Georgia, Bulgaria, Greece Tra ransit and Tra ransport C Cooperation (L (Lapi pis Lazu zuli li Route Agreement) Parti rticipating co countries: Afghanistan, Turkmenistan, Azerbaijan, Georgia, Turkey