On July 17, the United States Department of State published its 2024 Investment Climate Statement on Georgia. While giving positive assessment to the business climate in general, the report expresses concern for the independence of Georgia’s judiciary, particularly for “the judicial sector’s ability to adjudicate commercial cases independently or in a timely, competent manner.” Business dispute cases are often stuck in courts for prolonged periods of time, local decision-making processes are inefficient, and there is a lack of effective anti-trust legislation. Moreover, Georgia does not have an integrated commercial code. The report expresses worries about accusations of political meddling and the selective enforcement of laws, including commercial laws.
Overall, the report positively highlights Georgia’s favorable business climate, notes the growth trajectory of the country’s GDP, and welcomes the country’s alignment with EU legislation following the granting of EU candidate status in 2023 as an opportunity for making structural reforms in competition law, property rights, technical regulations, and other areas.
The report notes the resilience of the Georgian economy amid more recent global challenges, namely the COVID-19 pandemic and Russia’s invasion of Ukraine. “Overall, business and investment conditions are sound, and Georgia favorably compares to regional peers,” the report states. It also positively assesses the development of numerous infrastructure projects in Georgia, including strategic investments in the Middle Corridor connecting Europe and Central Asia, the tender for Anaklia port design and construction of marine infrastructure, as well as the construction plans for the new Tbilisi International Airport.
The report draws on the Heritage Foundation’s Economic Freedom Index 2024, which ranked Georgia 32nd among 184 countries, characterizing Georgia’s economy as “moderately free.” “Despite a challenging external and political environment, Georgia’s economy performed quite well in key policy areas. Reforms to enhance regulatory efficiency have been implemented, and open-market policies are maintained along with low tax rates. The economy has demonstrated a high level of resilience,” the document notes. “However, institutional weaknesses still require much more committed reforms because marginal reforms have not generated much improvement. Public spending has been growing as a share of GDP, and the budget balance has been negative. Inflation has been relatively high,” the Heritage Foundation’s report states.
Overall, the report finds that “the Georgian government continues to work to address these issues, and despite these remaining challenges, Georgia ranks high in the region as a good place to do business.”
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