GEORGIA IN FIGURES

Prof. lali CHageliSHvili

Inflation
From March 31 to April 6 the consumer price index (the indicator that shows the changes in the level of consumer prices) in Tbilisi made up 99,71%. At the end of March the mentioned indicator was 99,97%. (This index reflects the changes in prices of the basket consisting of 51 descriptions of goods and services).

In comparison with the same period, the general level of prices has decreased by 0.29%, including for food products – by 0.70%; while the prices of non-food products have increased by 0.22%; at the same time, the service tariffs have remained unchanged.
From April 7 to April 13 the consumer price index in Tbilisi (the indicator that shows the changes in the level of consumer prices) made up 100.06%. During the period from March 31 to April 6 the mentioned indicator was 99.71%. (This index reflects the changes in prices of the basket consisting of 51 descriptions of goods and services).
In comparison with the period from March 31 to April 6, the general level of prices has increased by 0.06%. Including for food products – 0.23%, while the prices of non-food products have increased by 0.21%; at the same time, the service tariffs have remained unchanged.
Food
At the end of March the price of cucumbers decreased by 6.9%, potatoes – by 6.1%, carrot- by 5.7%, frozen fish – by 5.0%, cheese – by 4.8%, onions – by 4.2%, tomatoes – by 3.4% and apples – by 2.2%; at the same time, the price of cabbage has increased by 7.4%, beet – by 7.0%, “Winston Light” cigarettes – by 6.5%, “Pirveli” cigarettes – by 2.0% and of sugar – by 0.7%.
Non-Food Products
During the analyzed period, the price of “Regular” gasoline increased by 2.2%, while that of kerosene decreased by 1.1%.
In comparison with the first week of April, the price of diesel fuel has increased by 0.8% and that of “Regular” gasoline – by 0.7%.
Concerning the state of Georgia’s payment balance 2005
The current account of Georgia’s payment balance is traditionally negative. In 2005 it made up -688.8 million USD, which is 97% more in comparison with the previous year’s corresponding indicator. The deficit of the current account is stipulated by the goods where the import exceeds the export by 1.8 times. The balance of its remaining components (services, incomes and current transfers) is positive.
In 2005, in comparison with 2004, the export increased by 35%, and import – by 34%, as a result of which the goods trade deficit increased by 33% and reached the level of -1213.9 million USD.
In 2005 the main import goods were: oil products, cars and therapeutic agents. Import growth determinant factors: increasing of oil products prices, sharp increase in import of cars and, partly, the construction of pipelines. In 2005 the main export products were: ferrous metals scrap, ferroalloys and natural wines. The main reason for increasing of export is rising of scrap prices and repayment of the Turkmenian debt in goods (sugar and aircrafts), as well as a sharp increase in the export of ferroalloys and nuts.
Balance of services is positive. In 2005 the positive balance made up 71.6 million USD, which is 28 % more in comparison with the corresponding indicator of the previous year. Correspondingly, export and import of services have increased as well.
Balance of incomes is positive. Here in credit prevail the incomes of Georgian residents from working abroad, and in debit – investment incomes.
Current transfers are rather considerable and partly balance the goods trade deficit. The balance of current transfers in 2004 was 413.9 million USD, while in 2005 it made up 359.2 million USD, which is 54.7 million less in comparison with the corresponding indicator of 2004, in other words, a 13% drop takes place.
A positive balance of capital and financial account made up 677.0 million USD, which is almost twice as more than the previous year’s indicator. This is mainly stipulated by the growth of the financial account’s positive balance that made up 617.3 million USD in 2005 (which is 102% more than in 2004).
In 2004, the volume of direct investments in Georgia has sharply increased and reached almost 500 million USD in connection with the construction of Baku-Jeikhan oil pipeline and Shakhdeniz gas pipeline. The construction of the pipeline on the Georgian territory was completed in 2005, which partly stipulated for decreasing of the volume of direct investments. At the same time, a redemption of foreign investment in a rather considerable volume (43 million USD) has also taken place. With the effect of all this, in the first three quarters of 2005 the net volume of investments made up 270.0 million USD. The situation distinctly improved in the fourth quarter, when direct foreign investments related to the privatization process increased sharply and made up 58.7 million USD, which is 1.6 times more than the volume of investments related to privatization made in the first three quarters of 2005. Rather considerable investments were made in relation to the construction of the pipeline and in the banking sector. All this stipulated for the fact that the volume of investments made in the fourth quarter of 2005 made up 177.8 million USD. Correspondingly, in all 447.8 million USD worth of direct investments were made in Georgia in 2005, which is 10% less in comparison with the 2004 data.
According to the table, if we exclude BS’s share from the total amount of investments, in 2005 there is a 31% growth of the remaining investments in comparison with the previous year. Reduction of the specific share of the largest investor (BP) means that a diversification and structural improvement of foreign investments took place in 2005.
The aforementioned circumstance is not a precondition for the fact that a sharp increase of direct foreign investments is expected in 2006.
Portfolio investments and financial derivations are insignificant since the formation of the financial market in a full-fledged form has not taken place yet.
The balance of other investments made up 176.2 million USD in 2005, which indicates increasing of our liabilities. This is partly stipulated by the process of restructuring of our debts. In accordance with the existing agreement, capitalization of the added on interest takes place, and a considerable part of the principal debt deferred. This will definitely relieve our payment burden. However, the liabilities are increasing correspondingly.
Reserve assets’ volume increased by 178.5 million USD in 2004, and in 2005 – by 111.6 million USD.