Author of the article:

Nikita

Real Estate Specialist
of Georgia

Date:  01.02.2024

Reading time: 8 min.

Views:  723

In the modern world, Georgia is attracting more and more attention as a country with huge economic and investment potential. This small but dynamic country at the crossroads of Europe and Asia is becoming increasingly attractive to foreign investors.

The importance of Georgia in the post-Soviet space and in Europe cannot be underestimated. Georgia is a country that combines a unique culture, history and potential for economic growth.

Ease of doing business and freedom of the economy

Georgia ranks high in the world rankings for ease of doing business. According to the World Bank's Doing Business 2020 report, Georgia ranks 7th out of 190 countries in terms of overall ease of doing business. This reflects the country's efforts to improve the business environment, simplify procedures and reduce administrative barriers.

In addition, Georgia also received a high rating in the index of economic freedom, which is compiled by the Heritage Foundation. In this ranking, Georgia ranks 12th in the world and 6th in the European region, which indicates a high level of economic freedom in the country.

The country's political and economic stability also helps attract foreign investment. According to the Global Peace Index, Georgia ranks 85th out of 163 countries, which indicates a high level of stability and security in the country.

All these factors make Georgia attractive for foreign investors and entrepreneurs looking for promising business and investment opportunities.

GDP growth and economic development

In recent years, Georgia has demonstrated stable GDP growth. According to the World Bank, from 2010 to 2019, the average annual GDP growth was about 4.7%. This indicates that the country's economy is on an upward wave, and there is every reason to expect its further development.

Tourism and foreign investment play an important role in Georgia's economy, contributing to its diversification and sustainable growth. According to the National Statistical Office of Georgia, the number of foreign tourists exceeded 9 million in 2019, which is 7.8% more than in the previous year.

Foreign investment also has a significant impact on the economy. According to the National Bank of Georgia, foreign direct investment in 2019 amounted to $1.3 billion, which is 0.2% more than in 2018.

These data confirm that Georgia is a country with a high potential for investment and economic development.

Foreign investment and its impact

Foreign direct investments in Georgia continue to grow, which confirms the confidence of foreign investors in the country's economy. According to the National Bank of Georgia, foreign direct investment in 2020 amounted to $1.23 billion, which is 9.5% more than in the previous year. This indicates the growing interest of foreign investors in the Georgian market.

Foreign investment contributes to creating new jobs, developing infrastructure and improving the competitiveness of the Georgian economy. In particular, thanks to foreign investment, more than 10,000 new jobs have been created in recent years, as well as significant infrastructure projects have been implemented, including the construction of new roads, airports and industrial facilities.

Thus, foreign investment plays a key role in Georgia's economic development, contributing to its modernization and integration into the global economy.

Tourism growth and its impact on the economy

Tourism in Georgia is one of the key sectors of the economy. According to the National Statistical Office of Georgia, the number of tourists visiting the country has more than doubled over the past five years. This growth in tourism has a direct positive impact on the local economy, contributing significantly to the country's GDP.

The growing real estate market also plays an important role in this. After all, with the increase in the number of tourists, the demand for housing also increases, which encourages the construction of new hotels and apartments. According to the Georgian Real Estate Agency, last year the volume of investment in the hotel business increased by 20%.

It is also worth noting that Georgia attracts tourists with its unique culture, hospitality, magnificent nature and high-quality services. All this makes the country attractive for tourists from all over the world, which in turn contributes to the further development of the tourism industry and the economy of Georgia as a whole.

Air transport development and new routes

Georgia's aviation industry is developing at an impressive pace. According to the Georgian National Tourism Administrative Center, in 2019, the number of passengers transported through Georgian airports increased by 5% compared to the previous year, reaching a record 5.2 million people.

The emergence of new air routes and the expansion of the aviation network open up new opportunities for tourism and business. So, in 2019, more than 30 new flights were opened connecting Georgia with cities in Europe, the Middle East and Asia. This not only increases the influx of tourists, but also facilitates business communication, opening up new horizons for Georgian business.

The development of air transport attracts foreign direct investment, especially in the hospitality and tourism sectors. For example, in 2019, the construction of several new hotels of international brands in Tbilisi and Batumi was announced, which was made possible largely due to the growth of the tourist flow.

Thus, the development of Georgia's air transport contributes to an increase in foreign direct investment and the development of tourism infrastructure, which in turn stimulates the country's economic growth.

The real estate market and its dynamics

The Georgian real estate market is attracting more and more attention from foreign investors. According to the National Statistical Service of Georgia, real estate prices in the country have increased by 30% in the last five years. At the same time, thanks to stable economic development and tourism growth, real estate in Georgia it remains affordable compared to many European countries.

Foreign investments in real estate play a significant role in the country's economy. According to the data of the National Bank of Georgia, the volume of direct foreign investments in construction and real estate in 2019 amounted to about 300 million dollars. This contributes to the development of the construction industry, the creation of new jobs and the overall economic growth of the country.

Walls Saburtalo

from $83 300

Georgia, Tbilisi, Vake

Tetris Shin

from $91 350

Georgia, Tbilisi, Vake

Balavari on Kavtaradze

from $61 155

Georgia, Tbilisi, Vake

Balavari Lisi

from $32 772

Georgia, Tbilisi, Vake

Sphera Nutsubidze

from $67 169

Georgia, Tbilisi, Vake

Lion Development

from $62 625

Georgia, Tbilisi, Vake

Thus, investments in Georgian real estate represent an attractive opportunity to receive a stable and high income. This is confirmed by the stable dynamics of real estate prices growth and the increasing volume of foreign investments in this sector of the economy.

Hotel residences from world brands

International hotel brands are increasingly represented in Georgia, which indicates a growing interest in this region. Investments in branded real estate promise good returns due to the growing tourist flow. It also increases the prestige of the country and attracts new investors.

Investment in infrastructure

Georgia actively invests in the development of its infrastructure, which in turn attracts foreign investment. According to the National Statistical Service of Georgia, in 2019, the volume of investment in construction and infrastructure amounted to about 33.5% of the total volume of foreign direct investment.

The construction of new roads, airports, hotels and tourist facilities creates favorable conditions for business and tourism, improving the overall economic picture of the country. For example, the opening of a new terminal at Tbilisi International Airport in 2017 helped increase passenger traffic by 20% in the first year of operation.

It is also worth noting that the construction of new hotels is underway not only in Tbilisi, but also in other tourist regions of the country, which contributes to the development of domestic tourism and makes the country more attractive for foreign tourists.

All these factors together make Georgia attractive for foreign investors and contribute to the country's sustainable economic development.

Conclusion

Based on the results of the analysis of Georgia's economic growth, we can confidently say that the country is an attractive destination for investment. Stable political and economic development, active attraction of foreign investment, growth of tourism and infrastructure development make Georgia one of the most promising regions for real estate investment.

If you are considering investing in Georgia, we recommend that you contact our company's professionals. We offer a full range of services for the selection and purchase of real estate in Georgia, as well as investment advice.