Armenia outscores Georgia on GDP level?

The Minister of Economy and Sustainable Development of Georgia Natia Turnava commented on Georgia's GDP compared to other countries of the region. According to Turnava, the statements made by experts and politicians are false as they do not take into account the fact that in November 2019, Georgia changed the methodology of GDP calculation, which is not yet included in the reports of international financial establishments, for example, the International Monetary Fund (IMF). Azerbaijan, Armenia, Ukraine, Moldova have also recalculated their GDPs with a new methodology. Accordingly, their data was already reflected in the IMF’s review.

“This is a misconception because it does not address elementary methodological issues. Generally, before any politician or expert hurries to compare Georgia to other countries in the region, I urge you to get acquainted with the elementary methodology,” Turnava commented.

As she stated, according to their conservative estimates, GDP per capita in Georgia will reach $ 4,700. Consequently, this will be reflected in the IMF review afterward.

Mamuka Khazaradze, the founder of the public movement Lelo, said that Georgia is losing its leading position in the region.

"We have already lost our economic position in our region. Of course, we are pleased with the success of our neighboring countries - Armenia and Azerbaijan, but at the same time, it is important where Georgia stands. In 2013, GDP per capita in Georgia was $4341, in Armenia 0 $ 3 732. We were ahead by about $ 600. In 2019 it changed dramatically and already last year, Georgia is $ 250 behind than our neighboring countries,” said Khazaradze said, adding that the economy is stopped and the last 7 years of Georgia's domestic and foreign debt has increased 2.5 times and reached Gel 22.5 billion.

Khazaradze also mentioned, that according to the tough and targeted reforms that Lelo has planned, Georgia will become the leader of the region again.

Recall that a few days ago, Armenian Prime Minister Nikol Pashinyan posted a statement on his official Facebook page, according to which Armenia cleared Georgia in GDP per capita at current prices, providing IMF data to confirm this. Citing Armenia's current GDP of $ 4,527 as of 2019, while Georgia's GDP per capita was $ 238 less - $ 4,289. Initially, Pashinyan's post stated that Armenia also outstripped Azerbaijan in terms of GDP, but later edited that post and wrote that Armenia did not outperform Azerbaijan in 2019, though the IMF forecasts that it will in 2020.

On November 15, 2019, the National Statistics Office of Georgia launched the introduction of the new GDP methodology - SNA 2008. Before that, Georgia counted the GDP measure according to the SNA 1993 methodology. As a result of the transition to a new methodology, the rules that Geostat records for individual economic operations have changed. Due to the peculiarities of the new methodology, the GDP rate of virtually every country passing on it is growing at a rate higher than that calculated by the previous methodology.

On November 15, 2019, Geostat released the new methodology for 2018, which estimates the size of the Georgian economy to be GEL 44.6 billion, up from GEL 3.5 billion, or 8.5%. As for GDP, it stood at $ 4,722 as of 2018, which is higher than Armenia. However, this change is not yet reflected in the IMF reports.

Armenia switched to the SNA 2008 methodology of calculating national accounts a few years before Georgia. According to the new methodology, the size of Armenia's GDP increased by 6.5% compared to the previous methodology.

The IMF updates World Economic Outlook Database twice a year, in April and October. The data, which is currently uploaded on the Foundation's website, is published in October 2019. Accordingly, in the case of Georgia, it is calculated by the SNA 1993 methodology.

As the IMF updates data in the World Economic Outlook and publishes Georgia's GDP based on the SNA 2008 methodology, Georgia's GDP per capita at current prices will also be high.