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Issue 77: External Trade - I-II Quarters, 2016

02-Aug-2016

 

External Trade - I-II Quarters, 2016
Issue  #77 / 02.08.2016

In the first half of 2016, compared to the corresponding period of the previous year:

   •   The volume of exports reduced (-5.7%) overall with the declines especially steep in the export of Ferro-alloys (-32.6%), motor cars (-24.5%) and medicaments (-24.4%).

   •   Without including medicaments for hepatitis C the volume of imports also decreased (-7.0%) overall with significant declines in the import of petroleum oil (-20.2%), petroleum gases (-28.6%) and motor cars (-15.3%).

  •   Turkey became a major export partner country, while exports to Azerbaijan reduced significantly.

 

             

1Source: National Statistics Office of Georgia

 



The volume of registered trade turnover in the first half of 2016 increased by 22%, compared to the corresponding period of the previous year, and amounted to USD 5705.1 mln.

 

Imports increased (30.0%)* in this period. However, exports declined (-5.7%). Therefore, the negative trade balance deteriorated further (43.4%).

 

 

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 *Imports include medicaments for hepatitis C, which were given to Georgia as a gift from Ireland and Canada. If we do not count the corresponding value (USD 1486 mln) of these imported medicaments, then in this period the volume of imports is USD 3270.9 mln, which is 7.0% lower than the corresponding indicator in the first two quarters of 2015. Therefore, the trade balance improved by USD 332.1 mln.

 

In the first two quarters of 2016, compared to the corresponding period of 2015, there was a significant decline in the export of the following products: Ferro-alloys (-32.6%), motor cars (-24.5%), medicaments (-24.4%), fertilizers (-16.5%), mineral waters (-10.7%) and nuts (-5.5%).

 

The reduction in the export of Ferro-alloys is connected to important changes in the export market. In Brazil and Ukraine, which were previously leading export markets in the first two quarters in 2015 (19% of total Ferro-alloys export), there were no exports in 2016.

 

The reduction in motor cars re-export is also connected to changes in the export market. In the first two quarters of 2015, the largest export market was Azerbaijan (45% of total motor car exports), however in the first half of 2016, Azerbaijan’s share was reduced to 11% which might be attributable to the “EURO 4”* regulation and the slowdown of economic activity in Azerbaijan.

 

In the case of medicaments there was no significant change in the export market, but the volume of exports declined to significant partner countries such as Uzbekistan, Azerbaijan, Turkey, Kyrgyzstan and Kazakhstan.

 

Elsewhere, in the first two quarters of 2016 there was a considerable increase in the export of copper ores (14.0%) and wines (16.0%).

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* The Euro-4 environmental standard restricts the import of cars manufactured in the EU before 2005, in USA before 2004, and in Japan before 2011.

 

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Source: National Statistics Office of Georgia

 

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Source: National Statistics Office of Georgia

                                                                                                                              

In the first two quarters of 2016, compared to the corresponding period of the previous year, if we do not count medicaments for hepatitis C gifted by Canada and Ireland, the volume of imports reduced in all commodity groups except copper ores.

 

The reduction in the import of petroleum and petroleum products (-20.2%) was mainly caused by decreasing imports from petroleum importing countries such as Romania, Azerbaijan, Bulgaria, Turkmenistan and Greece. However, it should be admitted that imports from Russia increased (141.3%) significantly in this period.

 

Japan remains the main source of motor cars imports (29% of total motor car imports), but the import volume of motor cars considerably reduced from Japan (-48%) in the first half of 2016. Notably, there was an increase in import volume from Russia (approximately double) here.

 

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Source: National Statistics Office of Georgia    

 

5Source: National Statistics Office of Georgia    

 

If we discount the medicaments for hepatitis C donated by Ireland and Canada*, then the main source of import is Turkey (21.7% of total imports). In the first half of 2016 the import volume from Russia increased by 17%, and as a result Russia became the second biggest partner country, while in the corresponding period of last year Russia was in 4th place, after Turkey, China and Azerbaijan.

Imports from Ukraine (-25.0%), Azerbaijan (-19.3%) and China (-17.7%) significantly declined in the first half of 2016. Imports from Ukraine consist largely of tobacco and iron and steel rods, with the volume of the latter considerably reduced (-22.2%).

A reduction in imports from China has been mainly caused by a decrease of computer imports (-22.9%), while the decline in imports from Azerbaijan is due to reduced petroleum imports (-47.5%).

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* Canada was a major partner of Georgia in terms of medicaments of hepatitis C for the first half of 2016 (26.6% of total imports). The Canadian share in the previous year’s total imports was only 0.1%. Ireland’s share in total imports also increased and amounts to 4.8%, which is largely attributable to the donation of hepatitis C medicaments.

                    

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        Source: Ministry of Finance of Georgia                                                                                                                                           * Forecasted 
                         National Statistics Office of Georgia
                         National Bank of Georgia                              

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