Due to its low factor costs, especially for land and labor, the production of internationally tradable goods is extremely rewarding in Georgia. But also local activities like running retail chains or hospitals promise good returns in a rapidly growing economy.
One of the main assets of the country are its extremely low factor costs for labor, land, construction, and energy. The energy sector e.g., especially hydroelectricity, is highly attractive for investors, as the production costs are low and the export opportunities are profitable. Currently, only 20% of Georgia`s hydroelectricity potential is used. Furthermore, Georgia is surrounded by countries with higher energy production costs and / or a high energy deficit (Turkey and Russia).
Agriculture and Food Processing
Agriculture and food processing is a sector with significant growth potential. Besides the variety of soil types and micro-climate zones, the country stands out with its relatively natural soil which is not yet poisoned by fertilizers or pesticides. At the same time, the EU`s demand for inexpensive high-quality agricultural products is growing. Today, nut products (especially hazelnuts) are one of Georgia`s main export goods.
Over the past five years, Georgia has shown a solid per capita spending growth. The retail landscape in Georgia is still dominated by traditional supply. AT Kearney ranked Georgia 2015 as number six on the Global Retail Development Index. Georgia still shows an underpenetrated market where modern retail formats like supermarkets represent only 30% of the total market. Large national and international chains such as Smart, Carrefour and SPAR are in a stage of expansion. Especially the capital Tbilisi with its 1.175 m inhabitants and the growing cities of Kutaisi, Batumi and Zugdidi show attractive opportunities for retailers.
Around five million people visited Georgia in 2015. In the same year, Georgia earned 1.935 billion USD from the tourism sector, which amounts to 7.3% of the total economic output. From January to March 2016, Georgia recorded an inflow of 1.134 million visitors, 14.7% more than in the same period in the previous year. Most visitors came from the neighboring countries. The number of tourists from the Persian Gulf countries, EU, China and the US is also rising. Visa regime simplification and liberalization will further boost the tourism inflow.