Analyses & Studies • Partners
French-Georgian Relations
Economic relations
French-Georgian Relations
EU-Georgia relations are governed by the Association Agreement, signed in 2014 that entered into force on 1 July 2016, which includes a Deep and Comprehensive Free Trade Area (DCFTA). Georgia is an important partner in the framework of the EU's European Neighborhood Policy.
The liberalization of the short-stay visa regime took effect on 28 March 2017. Acceleration of emigration.
EU assistance in Georgia is equivalent to 120 million euros a year. It focuses on the reform of public administration and justice, rural development, education, and the promotion of civil society.
The EU is Georgia's largest trading partner (29% of trade in 2018). In particular, the DCFTA helped stimulate imports from Europe (+ 19%).
Macroeconomic perspectives
South Caucasus Second Economy: GDP of USD 17 billion, GDP / Cap USD 4400
Growth is solid in 2018 at 4.8% with a forecast in 2019 prev. at 4.6%.
Main aggregates
| 2018 | 2019 | |
| External account | Existing balance (%GDP) | -9 | -9.3 |
Total exports (Billion USD) | 4,4 | 4,7 | |
Total imports (Billion USD) | 8.7 | 9.4 | |
External debt (Billion USD) | 18 | 19.5 | |
Foreign exchange reserve (by month of importation | 3.3 | 3.3 | |
| Banking sector | Own funds (% of total assets) | 22.5% | - |
Credits/Deposits | 107% | - | |
Doubtful loan ratio | 2.7% | - | |
| Public finances | Public debt (% GDP) (external debt) | 43.3 (108,9) | 43.5 (113.3) |
Government budget balance (% GDP) | -2.8% | -2.6% | |
Compulsory contribution rates | 27.9 | 28 | |
Ratings:
- Fitch: BB stable
- Moody's: Ba2 stable
- S&P: BB- stable
- BPI: B
- Transparency: 58/100
- OECD: 6
The French economic presence is strengthening
Georgia is France's largest market in the Caucasus, with whom it has a structural and growing trade surplus.
French exports: + 6.4% in 2018 (+ 44% in 2017) to 192 Billion EUR.
Main exports:
- pharmaceuticals 26% of exports (+ 0.4%);
- equipment 25% (+ 380%);
- chemicals 14.12% (+ 18.9%);
- LPN products 12% of exports (+ 2.1%);
Imports: + 26.6% to 45 Billion EUR.
Purchases of distilled alcoholic beverages 40% (+ 43%)
Market share: 2.88% (1.69% in 2017).
French companies have invested in traditional sectors:
- transport,
- agribusiness,
- commercial real estate,
- mechanical industry,
- recently
Bilateral trade: surplus and rising exports
Evolutions of the French's export and import with Georgia (Billion EUR)
Exports dominated by equipment and pharmacy
French export
Bilateral trade: progress in 2018
Evolution of the market shares
Energy, equipment and agriculture sectors of opportunity
- Gas, hydroelectricity; eolian
- Energetic efficiency
- Land Registration and Farmland Ownership Act; seed sector development;
- Geographical Indications
Strong support from donors
Strong presence of multilateral and regional donors (WB, ADB, EU, EIB, EBRD) and bilateral donors (AFD, KfW): infrastructure projects and technical assistance
AFD: opening of the regional office in Tbilisi in dec. 2016
Activities of Proparco, a subsidiary of AFD, for the financing of the private sector, in the banking, health and hydropower sectors.
Relations with Russia and the EEU
2018 exchanges with Russia:second partner (1.4 billion USD, + 15%) behind Azerbaijan since 2018.
Exports to Russia: 447 Billion USD, + 10%
Imports from Russia: 935 Billion USD + 17%.
Industrial base adapted to Russian standards. Russia's share of Georgian exports dropped from 14.5% to 13%.
EEU: trade growth: + 24%.
Georgian imports: 15.9% (15.2% in 2017)
Exports: 25.7% (25.4% in 2017)
Decrease in market shares.
Tourism: 1.4 million Russian tourists in 2018 (23%); 17%; higher expenses; diversified (mountain areas, casino, sea)
FDI: old investments in the energy sector, banking, mining and more recent telecommunications, agribusiness (Borjomi: Alfa- Nestlé).
Energy: 75% of the electricity distribution belongs to INTER; hydroelectric power stations in Gardabani (80% electricity in winter); Khami-1 and 2 etc .; gasoline distribution networks (Lukoil, Gulf); VTB (5% of the market); water supply of the capital; gold mine; telecommunications (Beeline - 8% of the market).
