In the second quarter of 2017, real Gross Domestic Product (GDP) growth in Georgia amounted to 4.7 percent year-on-year, based on a report published by GeoStat. Nominal GDP totaled at 9.06 billion GEL.
The highest growth rate year-on-year by sector was in the Construction sector, while a decrease was seen in the Agriculture, Hunting and Forestry; Fishing, and Electricity, Gas and Water Supply sectors.
Sector growth rates y/y in the second quarter of 2017:
Construction - 16.4% growth y/y
Hotels and restaurants - 12.9% growth y/y
Private Households Employing Domestic Staff and Undifferentiated Production Activities of
Households for Own Use - 9.6% growth y/y
Mining and Quarrying - 7.4% growth y/y
Real estate with real estate - 7.2% growth y/y
Transport - 7% growth y/y
Financial activity - 6.4% growth y/y
Communications - 4.8% growth y/y
Wholesale and Retail Trade; Repair of Motor Vehicles, Motorcycles and Personal and
Household Goods - 3.7% growth y/y
Imputed Rent of Owner Occupied Dwellings - 3.6% growth y/y
Other community, Social and Personal Service Activities - 2% growth y/y
Education - 1.3% growth y/y
Health Care - 1.2% growth y/y
Manufacturing Industry - 1% growth y/y
Energy - 0.9% decrease y/y
Agriculture - 2.4% decrease y/y
In the first half of 2017, Georgia's agriculture sector decreased. Turnover amounted to 635 million GEL in the first quarter of this year, which is 1.5% less than the previous year. In the second quarter of 2017, the agriculture sector amounted to 776 million GEL, which is 2.4% less than the second quarter of 2016.
Although the government announced that the agriculture sector as its priority, in the first half of this year, only $ 3.7 million was invested in total in the agriculture sector, including from both government and foreign sources, which amounts to only 0.4% of total investments in the country.
Moreover, because of a land moratorium reform on selling agricultural land to foreign citizens, the agriculture sector will be almost unavailable for foreign investments.
In 2016, agriculture sector turnovers reached $ 9.9 million, which was 0.6% of total investments.
Last year, the economic growth rate in the agriculture sector was 0%, which means that the sector is in a steady-state.
Despite the lack of growth, the government is actively participating in various agriculture projects, and the amount invested in the sector by the government for the past three years is approximately half a billion GEL.
For commercialization of agriculture, large agricultural farms (50 hectare and more) are necessary. However, in Georgia, 85% of farm lands are small (less than five hectares) and therefore used only for personal purposes. Establishment of large farms and encouraging innovation in this sector is vital for growth.