BAKU, Azerbaijan, June 30
By Tamilla Mammadova – Trend:
Net foreign direct investment (FDI) inflows in Georgia decreased by 41.7 percent in first quarter of 2020, compared to in first quarter in 2019, Trend reports referring to Policy and Management Consulting Group (PMCG), an international development consulting company primarily focused on transitional and developing countries.
As reported, compared to its peak in the first quarter of 2017, net FDI inflows decreased by 59.8 percent in first quarter of 2020.
The average growth rate of net FDI inflows in the first quarter 2020 over past decade amounted 2.1 percent. The growth rate has been negative and expressed in double figures since 2018.
A vast majority (81.6 percent) of net FDI inflows in the first quarter of 2020 were reinvestments of earnings, while only 13.7 percent were equity investments.
As the main consequences of the crisis will become visible in second quarter of 2020, even gloomier figures of net FDI inflows are expected. Thus, a strong rebound is needed in third quarter of 2020, a quarter which on average accounts for the most net FDI inflows (31 percent), in order to end the year with the estimates of International Monetary Fund (-19 percent), said PMCG.
The significance of FDI flows for the development of the country is indisputable. When the crisis ends, investors will be looking to direct their funds to lucrative investment options, thus, it is of paramount importance that Georgia positions itself as an attractive market, said the report.
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