Georgia, a country rich in mineral resources, has seen a significant drop in its gold export in the first month of 2024. According to the National Statistics Office of Georgia (GEOSTAT), the country exported only 0.21 tons of gold worth $7.08 million in January, which is 40% less than the same period in 2023.
What Caused the Decrease in Gold Export?
There are several factors that may have contributed to the decrease in Georgia’s gold export in January 2024. One of them is the global decline in gold prices, which reached a six-year low in December 2023. The average price of gold in January 2024 was $1,660 per ounce, which is 11% lower than the average price in January 2023.
Another factor is the reduced demand for gold from Georgia’s main export markets, namely Switzerland, Turkey, and the United Arab Emirates. These three countries accounted for 99% of Georgia’s gold export in January 2024, but their imports decreased by 37%, 28%, and 82% respectively compared to January 2023.
A third factor is the impact of the COVID-19 pandemic, which has disrupted the global supply chains and trade flows of many commodities, including gold. The pandemic has also affected the mining sector in Georgia, which faced challenges such as labor shortages, health and safety measures, and environmental regulations.
How Does Gold Export Affect Georgia’s Economy?
Gold is one of the most important export commodities for Georgia, as it accounts for about 10% of the country’s total export revenue. Gold is also a major source of foreign exchange, which helps the country maintain its balance of payments and currency stability.
Gold export also supports the development of the mining sector in Georgia, which employs about 15,000 people and contributes to about 2% of the country’s gross domestic product (GDP). The mining sector is also a key driver of investment, innovation, and infrastructure in the country.
Therefore, the decrease in gold export in January 2024 may have negative implications for Georgia’s economy, especially if it persists for a longer period. The country may face lower export earnings, reduced foreign exchange reserves, and lower economic growth.
What Are the Prospects for Georgia’s Gold Export?
Despite the decline in gold export in January 2024, there are some positive signs for the future of Georgia’s gold industry. One of them is the discovery of new gold deposits in the country, such as the Kvemo Bolnisi project, which is expected to produce about 50,000 ounces of gold per year.
Another sign is the increase in gold production in Georgia, which reached 2.8 tons in 2023, a 75% increase from 2022. This indicates that the country has the potential to increase its gold output and export in the coming years.
A third sign is the diversification of Georgia’s gold export markets, which may reduce the country’s dependence on a few major buyers. In 2023, Georgia exported gold to 12 countries, including new destinations such as India, Singapore, and Hong Kong. This may help the country find new opportunities and increase its competitiveness in the global gold market.
