Foreign investment in Georgia took a significant hit last year, falling by nearly 30%. The decline, marked by lower equity inflows and reduced reinvestment, has economists raising their eyebrows — and concerns.
Numbers That Tell a Tough Story
The National Statistics Office of Georgia (Geostat) reported that foreign direct investment (FDI) dropped to $1.333 billion in 2024. That’s a hefty 29.9% slide from 2023, marking the second consecutive year of decline.
For a country that relies heavily on international capital to fuel growth and infrastructure, this is no small matter. The dip is largely pinned on two main factors: weaker equity inflows and falling reinvestment rates. In other words, new money isn’t coming in fast enough, and the companies already here aren’t reinvesting as much.
One sentence stands out in the report: the top three investor countries — the United Kingdom, Malta, and the Netherlands — made up a staggering 58.2% of the total FDI.
Who’s Still Betting on Georgia?
Even with the downturn, some countries stayed loyal to Georgia’s market. The United Kingdom led the way, contributing 33.6% of total FDI. Malta followed with 13.2%, and the Netherlands chipped in 11.4%.
It’s an interesting mix — with Malta punching well above its weight. Meanwhile, larger players like the United States and Germany were noticeably absent from the top contributors.
Sector Breakdown: Where Did the Money Go?
Some sectors still managed to attract investment, even if the overall figures were bleak.
- Financial and Insurance Services led the pack, pulling in $526.5 million — a hefty 39.5% of the total FDI.
- Energy wasn’t far behind, with significant contributions from companies like JSC Energo-Pro Georgia and Tbilisi Energy LLP.
- Telecommunications also held steady, buoyed by Magticom LLP’s continued expansion.
The data paints a clear picture: investors are leaning toward essential, less volatile industries rather than riskier ventures.
Who Are the Big Players?
Even in a tough year, some companies kept the cash flowing. Geostat highlighted the top investors in 2024:
- IDS Borjomi Georgia & IDS Borjomi Beverages Company (Georgian branch)
- Magticom LLP
- Tbilisi Energy LLP
- JSC Energo-Pro Georgia
- Toyota Caucasus LLP
- Silk Road Group Holding LLC
- IG Development Georgia LLC
- JSC BGEO Group
- Global Beer Georgia LLC
- SOCAR Midstream Operations LLC (Georgian branch)
These companies, many with deep roots in the region, continue to bet on Georgia’s long-term potential — even as the short-term outlook looks murkier.
What’s Scaring Off Investors?
The big question: why is FDI shrinking?
A few factors seem to be at play. First, political uncertainty lingers, leaving investors jittery. The country’s ongoing balancing act between the West and Russia complicates long-term strategies.
Second, infrastructure bottlenecks and regulatory hurdles remain persistent thorns in the side of potential investors. A slow-moving court system and concerns over transparency don’t exactly scream “open for business.”
Finally, global factors can’t be ignored. Rising interest rates and economic slowdowns in key investor nations — particularly the UK — may have trickled down to Georgia.
Can Georgia Turn It Around?
With two straight years of declining FDI, Georgia has a challenge on its hands. Officials are under pressure to make the country more attractive to investors — fast.
Experts suggest a mix of strategies:
- Streamlining regulations to make market entry quicker and less bureaucratic.
- Investing in infrastructure to improve roads, ports, and energy grids — key concerns for large investors.
- Targeting new markets in Asia and the Middle East to diversify the investor base.
There’s still time to reverse the trend. But the clock is ticking.
