THE STRUCTURE OF DIRECT FOREIGN INVESTMENTS IN GEORGIA AND MEASURING THEIR IMPACT ON GROSS DOMESTIC PRODUCT AND ECONOMIC GROWTH

Abstract

What is the situation in Georgia in this regard? From the time of independence to 2021, up to 23 billion dollars have been invested in Georgia. In which sector of the economy did the largest share of incoming investments go? Were these industries a real sector of the economy? And how these investments have affected even such macroeconomic indicators as the dynamics of the gross domestic product and economic growth.
Unfortunately, there are still unresolved challenges facing our country as obstacles to the growth of direct foreign investments in Georgia: 1. Underdevelopment of the capital market and stock exchange; 2. High interest rates on financial resources; 3. Political instability in the region and the problem of guaranteeing property rights; 4. Small market, low qualification of workforce and high rate of poverty; In addition to the challenges, Georgia has natural and also achieved advantages in the region:

Strategic location – at the crossroads of Europe and Asia;
Free trade agreement with the 2.3 billion market: EU, China (including Hong Kong), Turkey, Ukraine, CIS and European Free Trade Organization (EFTA) (Iceland, Liechtenstein, Norway and Switzerland);
Low taxes. We are the 8th country in the world with the lowest tax burden. There are only 6 types of taxes in the country. as well as exemption from profit tax, in case of reinvestment of the won amount;
In the case of correct use of all the above-mentioned non-piracy, it is quite possible to achieve and maintain a high rate of growth of the Georgian economy.