Summary.

The article presents the dynamics and structure of the foreign trade of Georgia, as well as export-import of the country (commodity) and trade balance statistics. On the basis of complex analysis of this material, recommendations have been developed that together with the expansion of export potential will promote Georgia's integration into the international and European markets.

Keywords: trade deficit, export, import, trade turnover.

Foreign trade trends of Georgia in 2018

Under the current market economy, improving the country's economic situation is largely dependent on its involvement in international trade. Consequently, the dynamics and structure of the foreign trade in the state and the overall trade policy issues in all countries, including Georgia, do not lose its topicality.

Georgia's foreign trade turnover increased by 16.9 percent in 2018 (compared to the same in 2017) and total volume of 12 484.4 million USD in the absolute value. As a result, the registered import of goods increased by 14.9 percent and amounted to 9 122.3 million US dollars, while exports amounted to 3 362.1 million USD and exceeded 22.9 percent, respectively, in 2017. The positive momentum is that in 2018 the continuity of export growth in the EU countries, as well as the Common wealth of Independent States (CIS), the Black Sea Economic Cooperation Organization (BSEC), GUAM and Economic Cooperation and Development Organization of OECD.

In 2018, Georgia entered the main exporting countries: 1. Azerbaijan (14.9%); 2. Russia (13.0%); Armenia (8.5%); 4. Bulgaria (7.7%); Turkey (6.9%); 6. China (5.9%); Ukraine (5.2%). The total share of these countries amounted to 62 percent of total exports of Georgia. In 2018 the increase in revenue from exports was made at the expense of the following commodity positions (Please see Table №1).

Table №1. Georgian Exports by Commodity Position in 2018[1]

Based on the analysis of the data presented in the form of a table, we see that exports from the largest export commodity groups are exports of copper ores and concentrates, motor cars and ferro-alloys in total exports. In 2018, with the growth of export revenue, it is noteworthy that in 2018, the increased export of motor cars is worth mentioning. In particular, the export of motor cars in the year 2018 increased by 74.1 percent and accounted for 12.2 percent of total exports. However, due to the fact that in Georgia there is no automobile production, the goods cannot be considered as the real sector of Georgia's economy, so the growth is only related to the increased re-export of motor cars. In 2018, cigars, cigarillos and cigarettes significantly increased 3.5 times, and 15.2 percent Waters, natural or artificial mineral and aerated waters exports.

As for imports, in 2018 imports increased from EU countries as well as OECD, the Organization for Economic Cooperation and Development, BSEC, CIS and GUAM countries. It is also important from the countries of the region, namely: increased import from Russia, Armenia and Azerbaijan.

In 2018, Georgia entered the number of the main importing countries: Turkey (16.1%); 2. Russia (10.3%); 3. China (9.1%); 4. Azerbaijan (6.4%); 5. Ukraine (5.6%); Germany (4.7%); 7. The US (3.9%). The total share of Georgia's total imports was 56.3 percent.

If we analyze the dynamics of the imports of 2018, we should note that in the case of substantial impact on import growth, the increase in imports petroleum and petroleum oils resulted in 9.5 percent of total imports. Imports of motor cars and copper ores and concentrates is also important, in particular, imports of motor cars accounted for 6.5 percent of total imports and imports of copper ores and concentrates were 4.3 percent (Please see Table №2).

Table №2. Georgian Imports by Commodity Position in 2018[2]

In analyzed 2018 motor cars increased; Copper ores and concentrates; Cigars, cigarillos and cigarettes. As well as automatic data processing machines and units thereof; Wheat and meslin and mixed goods import.

Despite the increase in foreign trade turnover in 2018, remains an important issue, with an increase in foreign trade deficit. In 2018 foreign trade deficit (compared to 2017) increased by 10.7 percent and totaled 5.160.2 million USD in absolute terms, totaling 46.1 percent of total foreign trade turnover. In turn, trade deficit is not a problem for the developed economies of the developed world, but the growing indicator of trade deficit is a reduction in national savings, which in turn impedes the growth of capital, productivity and life.

The findings of the survey can be summarized as follows: In 2018, despite the increase in foreign trade turnover with the EU countries, there has been a substantial backward trend of imports from imports. In particular, the import from EU countries in Georgia in 2018 - exceeded 3.6 times exports from the EU to Georgia. Consequently, in export of EU countries, it is expedient to make high quality products relevant to EU market standards in order to enable the country to maximize the capabilities offered by the DCFTA in conjunction with the Deep and Comprehensive Free Trade Area (DCFTA).

While free trade begins when the country becomes an exporter of goods, the local price of these goods increases, at the level of world prices, free trade between countries is still mutually beneficial. Because active involvement in international trade allows them to produce goods and services in which they have the advantage. Based on the research conducted in this direction, the sectors of economy in which Georgia has the comparative advantage are: transportation, first of all - energy resources, as well as agriculture and food industry, hydropower, tourism [Papaphilippou, 2008; 49; Samson, 2008: 76].

Therefore, it is important to increase investments in the field of agriculture and industry. Considering the fact that, in the Georgian import commodity groups, agriculture products are represented by a very diverse range of products.

It is also feasible to stimulate the real sector development of the country's economy and to develop effective trade policy by the state government. We think the implementation of these measures will contribute to the growth of the country's export potential and the overall foreign trade relationship.