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Reduction in re-export of vehicles among main reasons for Georgian export decline

Business Materials 19 February 2021 12:20
Reduction in re-export of vehicles among main reasons for Georgian export decline

BAKU, Azerbaijan, Feb.19

By Tamilla Mammadova – Trend:

In December, Georgia’s exports experienced a 17.7 percent annual decline, Trend reports via the ISET-PI, a think-tank based at the International School of Economics of Tbilisi State University.

This drop was driven by a reduction in the re-export of motor cars and trucks from Armenia, alongside the declining re-export of motor cars from Azerbaijan; export/re-export of motor cars and trucks, electrical transformers, and natural grape wines to the Kyrgyz Republic; and export of copper ores and concentrates to the United States.

There was, however, a slight increase in the export of natural grape wines, alcoholic beverages and chemical fertilizers to Ukraine; and the export of raw gold to Switzerland.

Overall, re-export of vehicles other than railway or tram rolling-stock has the highest negative contribution to the export decline (-16.4 ppts), and export of iron and steel was the second-largest category in this regard (-6.4 ppts). While beverages, spirits and vinegar (1.9 ppts); edible fruit and nuts, peel of melons or citrus (1.9 ppts); and pearls, precious or semi-precious stones (1.7 ppts) had the highest positive contribution.

During this period, the import of goods decreased by 17.9 percent, driven by a reduction in petroleum and fuel product imports from Russia and Azerbaijan (mostly due to a significant annual reduction of crude oil prices on the international market). Among other negatively affected imports were: carbon steel rods and frozen meat of cattle from Ukraine; motor cars and wires from Turkey; motor cars from the US and Japan; copper ores and concentrates from Peru and Australia. In contrast, Georgian imports of copper ores and concentrates from Chile; and imports of medicines and medical equipment from the Netherland experienced yearly growth.

Consequently, the trade deficit shrank dramatically by 17.7 percent yearly and amounted to $473.3 million. Overall, trade-related variables had a positive contribution to the GDP growth forecast.

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