Georgia’s Latest Foreign Trade Figures: Export Growth and Import Decline

In September, Georgia’s imports of goods decreased by 4.2% compared to the same period last year, amounting to $1.323 billion. This decline was primarily driven by a sharp reduction in the import of consumer goods, linked to reduced economic activity and decreased purchases of passenger cars intended for re-export. Despite the drop, passenger cars continue to account for a significant portion of total imports. Additionally, imports of mixed goods, cigarettes, and sugar also declined, signaling potential structural changes in the consumer market.

The import of investment goods also decreased, reflecting reduced purchases of machinery, tractors, and other equipment. This trend may be attributed to economic uncertainty, prompting businesses to reduce capital expenditures and reevaluate investment projects. Companies are adopting a more cautious approach, focusing on only the most essential initiatives. Nevertheless, the import of trucks, dishwashers, and medical equipment increased, driven by rising demand in these sectors, indicating growth in specific areas.

The import of intermediate goods rose moderately, primarily due to increased purchases of carbon steel rods, immunological sera, and manganese ores. This growth suggests rising demand for materials required by the industrial sector, potentially reflecting an increase in production activity. Moreover, the growth in intermediate goods imports indicates heightened economic activity in sectors reliant on steel and other materials, signaling development in local manufacturing.

In contrast, exports grew by 17% year-on-year in September, reaching $615.6 million. The increase in exports was largely driven by consumer goods, with passenger cars and alcoholic beverages contributing significantly. The growth in passenger car exports highlights the diversification of Georgia’s export portfolio and increased activity in the transportation sector. This trend also underscores the competitiveness and quality of Georgia’s manufactured vehicles in international markets. Additionally, the export of mineral waters, soft drinks, and hazelnuts increased, reflecting the international popularity of Georgian products and the country’s potential in agricultural production and export.

Investment goods exports also continued to grow, particularly in categories such as construction equipment and refrigerators. This trend points to the expansion of the construction and industrial sectors in regional and international markets. The rise in construction machinery exports could be driven by increased demand in regional markets, enabling local producers to deliver their products to a wider audience. However, the re-export of tractors and trucks decreased slightly, potentially due to heightened competition in some export markets, compelling Georgian companies to seek new partners and expand their geographic reach.

Among Georgia’s main trading partners, the United States, Japan, and Austria contributed most significantly to the decline in imports, primarily due to reduced purchases of passenger cars and loading machinery. While these countries previously held a significant share in Georgian imports, their activity has decreased, possibly due to revised economic policies or shifts in market demands. Conversely, imports from China and Germany increased, reflecting strengthened and deepened economic ties with these nations. China’s role is particularly notable, encompassing imports of trucks, refrigeration equipment, and air conditioning systems, indicating growing use of modern technologies and infrastructure development.

On the export side, Kyrgyzstan and Kazakhstan were the largest contributors to increased revenues, driven by a sharp rise in passenger car exports. This reflects Georgia’s strengthened trade relations with Central Asian countries and the growing popularity of Georgian goods in these markets. Additionally, the export of alcoholic beverages, mineral waters, and other products to Russia, Azerbaijan, and Saudi Arabia increased, underscoring high demand for Georgian goods in these regions. The growth demonstrates the quality and competitiveness of Georgian products and the rising demand in regional markets.

In September 2024, significant changes were observed in Georgia’s foreign trade: exports grew, positively impacting the trade deficit, while imports, particularly of consumer and investment goods, declined. These trends highlight the country’s economic trajectory and global connections. The decline in imports may indicate reduced domestic market demand or cost-cutting tendencies among businesses. Conversely, the growth in exports confirms the competitiveness of Georgia’s production and the international appeal of its products. For Georgia, maintaining export growth and diversifying markets will be crucial for ensuring economic stability and creating new job opportunities.