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Growing External Trade (January-March 2018)

Exports experienced a 28% increase, while imports grew by 21% in 1Q18.

In the January-March period, Georgia’s external trade turnover (excluding undeclared trade) totaled 2.8 million USD, up 23.3% from last year, including exports totaling 740.3 million USD (up 28.4%) and imports amounting to 2,083.4 million USD, up 21.6%. Georgia’s negative trade balance equaled to 1,343.1 million USD, which is 47.6% in external trade turnover. In the same period, exports without re-exports constituted 554.8 million USD, up 18.6% when compared to the same period in 2017.

It is noteworthy that the January-March exports, imports and negative trade balance were the highest they have been within the past five years. As for percentage indicator, better indicators than in 1Q18 were registered only in 2014. For example, during the same period in 2017, the negative trade balance was 49.6%, in 2016: 54.2%, in 2013-2015: 48.3%, 45% and 56.4%. Despite a reduced negative trade balance in total compared to the past three years, the number of countries where Georgia’s exports are of lower value compared to its imports increased in 2018.

In January-March 2018 Georgia’s foreign trade turnover with EU countries totaled 820.1 million USD, up 27.6% compared to the same period in 2017, including exports totaling 209.4 million USD, up 31.4%, and imports of 610.7 million USD, up 26.4%. The ratio of these countries in Georgian foreign trade turnover was 29%, including 28.3% in exports and 29.3% in imports. In January-March 2017 these indicators were 28.1%, 27.7% and 28.2% respectively. The ratio of EU countries in Georgia’s trade deficit made up 29.9% (28.5% in January-March 2017).

Foreign trade turnover with CIS countries constituted 976.9 million USD, up 30% compared to January-March 2017, including exports totaling 303 million USD, up 48%, and imports of 673.9 million USD, up 23.2%.

The ratio of CIS countries in Georgia’s foreign trade turnover was 34.6%, including 40.9% in exports and 32.3% in imports (32.8%, 35.5% and 31.9% respectively in January-March 2017). The ratio of CIS countries in Georgia’s negative trade deficit was 27.6% (30.1% in January-March 2017).

It is noteworthy that in 2018, foreign trade turnover rose with EU countries, but declined with CIS countries. Over the past years this tendency has become irreversible.

As for major import and export items, oil (import) and copper (export) lead. In January-March 2018, in the top ten exports items copper ores and concentrates rank first with 118.8 million USD, a 16% ratio of total exports. Exports of ferroalloys made up 85.1 million USD (or 11.5% of total exports). Motorcars rank third, with 64.9 million USD and 8.8% share.

In this reporting period, the top ten import items ranked oil and oil products first with 186.9 million USD and a 9% ratio. Gas ranked second with 127.4 million USD and a 6.1% share. Motorcars rank third, with 118 million USD and a 5.7% ratio.

It should be noted that the ratio of domestic production remains low for Georgia’s exports. The country exports semi-finished products or carries out re-exports of vehicles that bring less benefit to the economy, unlike domestically manufactured products such as wines, medications and water.

Thus, the government of Georgia should focus on developing export-oriented domestic production, like that of developed countries.

 

Source: https://bit.ly/2rda7Gj

 

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