Page 25 - GEORptJul19

resident units and a reduction in liabilities to non-resident direct investors, Geostat observed.
The volume of new equity investments dropped by 41% y/y to $700mn, which was also 41% below the average in the previous five years. The volume of earnings generated by FDI companies in Georgia and re-invested dropped by 15% y/y but was 60% above the five-year average. Inter-company borrowing was not yet significant: a negative $26mn in 2018 (local FDI companies returning loans to partners in the same group abroad).
The largest FDI investor remained Azerbaijan (19.5%), followed by the UK (16.5%) and the Netherlands (13.6%). Azerbaijan was the largest investor in the country due to the gas pipeline project centred on Shah Deniz.
Meanwhile, one of the fastest growing investors, China, ranked as the seventh largest investor in Georgia with $65mn of investments in 2018.
Data also showed that the financial sector attracted $277mn of investment, the biggest share of FDI last year.
FDI in the mining industry in 2018 also increased at a fast pace, by 29% compared to 2017.
According to Maia Zavrashvili, head of the National Agency of the Ministry of Economy, as quoted by InterPressnews, investment growth will remain strong in 2019.
"The dynamics of direct foreign investment in the mining sector are due to the current and implemented reforms in the fossil sector—increasing access to geological information, optimising administrative business processes, and the reduction of the initial auction price for catalysing the research of mineral resources," Zavrashvili said.
FDI in Georgia by sector [‘000 $]
2013
2014
2015
2016
2017
2018
y/y
vs. 5y avg
Total, o/w
1,020.5
1,817.7
1,665.6
1,565.8
1,894.5
1,232.4
-35%
-23%
Equity
534.3
1,151.9
1,281.5
1,798.2
1,187.9
699.9
-41%
-41%
Reinvested earnings
276.5
322.9
157.7
334.1
657.5
558.8
-15%
60%
Debt instruments
209.8
342.9
226.3
-566.5
49.1
-26.2
-153%
-150%
Source: NSI of Georgia, bne Intellinews
25 GEORGIA Country Report July 2019 www.intellinews.com