Foreign direct investment (FDI) to Georgia increased by 22% y/y to $1.64bn in 2016, the country's statistics agency Geostat said in a report published on March 10. On an adjusted basis, FDI rose by 5%.
Georgia has been seeking to attract FDI by positioning itself as a node for transport of freight and oil and gas between Asia and Europe. Neighbouring Azerbaijan's large-scale gas transport scheme, dubbed the Southern Gas Corridor, has been a particularly important source of investment into the country in recent years.
For that matter, Azerbaijan was the leading foreign investor in Georgia last year, accounting for 35% of total FDI, followed by Turkey (17%), the UK (7%) and the Netherlands (6%).
Likewise, transport and communication was the main recipient of FDI (39%), followed by energy (12%), construction (10%) and the financial sector (8%).
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Despite stellar growth, investors are nervous about the lack of regulatory predictability in particular on fiscal policy, which will keep FDI volumes from rising in future.