PMCG Foreign Direct Investments in Georgia

Abstract

The COVID-19 pandemic and the subsequent Great Lockdown has affected investment flows all over the globe, especially in emerging markets. As of April 9, portfolio outflows from developing countries amounted $100 billion, which is 3 times higher than the corresponding figure during the Great Recession in 20081. Deteriorating investor confidence will alter the global Foreign Direct Investment (FDI) flows as well. United Nations Conference on Trade and Development (UNCTAD) estimates global FDI flows to shrink by 30-40%% in 20202, reaching the lowest level of the past two decades. As for Georgia, International Monetary Fund (IMF) forecasts a 19% decrease in FDI flows in Georgia3. In order to assess the impact of the crisis on the FDI flows in Georgia in the future, it is crucial to have a snapshot of pre-crisis situation