Export-import and trade balance regulation and challenges in Georgia

Abstract

In the process of sustainable economic development of Georgia, an important place is occupied by foreign trade policy, including export-import regulation and trade balance management. Georgia's economic development is significantly dependent on foreign trade. Its geographical location, as a crossing point of the Caucasus, creates favorable conditions for the development of trade routes. The dynamics of export and import determine the country's foreign trade indicators and are largely related to budgetary, tax and monetary policies, the purpose of which is to encourage exports, optimize the import structure, improve the trade balance and achieve economic sustainability. The paper discusses the mechanisms of export and import regulation, their impact on the country's economic growth, financial stability and competitiveness. The institutional and legal barriers that hinder the full realization of export potential are investigated. The focus is on the low level of utilization of the opportunities provided for by the Association Agreement with the European Union and the weak export diversification policy. The main challenges facing Georgia in the process of economic integration into global markets are highlighted. The focus is on the fact that despite the growth trends in exports, the dominance of imports in foreign trade creates a negative trade balance, which has increased for Georgia by almost 2.2 times in recent years and which negatively affects the current economic and financial processes, the stability of the national currency and the attraction of foreign investments.