Vladimer Bozhadze: “Georgia surpasses six European Union member countries and all of the EU candidate countries in terms of gross national income.”

Verdict: FactCheck concludes that Vladimer Bozhadze’s statement is FALSE.

Whilst the gross national income (GNI) and the gross domestic product (GDP) are similar, the GNI focuses on the residence of the individual receiving income rather than their geographic location.

The GDP is the primary measure for assessing a country’s economic performance but the GNI can also be used. Furthermore, the per-capita measures of the GDP and the GNI are essential for measuring the quality of life of individuals within a country.

The poorest European Union member country is Bulgaria. Despite Georgia’s faster economic growth rate, which has helped to close the gap over the past few years, it still remains poorer than Bulgaria. Whilst Georgia surpasses the six countries mentioned by Bozhadze (Latvia, Estonia, Malta, Luxembourg, Cyprus and Iceland) in terms of the GNI, it lags behind all of them in per-capita terms. Furthermore, Iceland is not a member of the European Union.

Georgia does not lead the statistics amongst the European Union member candidates either. It ranks fourth out of the nine countries both in aggregate and per-capita terms. Particularly, Turkey, Ukraine and Serbia surpass Georgia in aggregate measures whereas Turkey, Serbia and Montenegro lead in terms of income per capita.

Considering the factual inaccuracies and misrepresentation of the context that could lead to misinterpretation of the data, suggesting that Georgia surpasses Iceland and Luxembourg in terms of the standard of living, FactCheck concludes that Vladimer Bozhadze’s statement is FALSE.

Analysis

Member of the Tbilisi City Assembly from the Georgian Dream political party, Vladimer Bozhadze, published a post on Facebook, stating: “Georgia surpasses six European Union member countries and all of the EU candidate countries!” The aforementioned post included an informational card by Newshub, which claimed that Georgia surpasses six EU member countries (Luxembourg, Iceland, Malta, Cyprus, Latvia and Estonia) in terms of the purchasing power parity (PPP) GNI, according to a World Bank report. Whilst Mr Bozhadze did not specify the metric in which Georgia surpasses these six countries, the shared article suggested that he was referring to the GNI.

The gross national income (GNI) contextually resembles the GDP with the key difference being that the GNI calculates production in terms of residency rather than geographical location. For instance, the incomes received by Georgian residents abroad is included in the GNI but not in the GDP and vice versa for non-residents earning in Georgia. Whilst the GNI and the GDP differ monetarily, this difference is typically not large. Georgia’s GNI in purchasing power terms constituted USD 87 billion in 2023 whereas its GDP amounted to USD 93 billion. These metrics were even closer and almost identical ten years ago: the GNI was USD 39 billion whilst the GDP was 40 billion.

Any claim that Georgia surpasses the EU member Iceland is inaccurate as Iceland is not part of the EU. Therefore, this part of Vladimer Bozhadze’s statement is false.

Although Iceland is not in the EU, it is still interesting to assess whether Georgia surpasses it along with the other five mentioned countries in terms of the GNI.

Georgia indeed ranks first with USD 87 billion, followed by Latvia with USD 78 billion and Iceland in the last place with USD 31 billion if calculated on aggregate levels.

Graph 1: Gross National Income in Purchasing Power Parity Terms (Billion International Dollars), 2023

Source: World Bank

Calculating the GDP and the GNI in per-capita terms is essential for evaluating the standard of living. Otherwise, Bangladesh might appear richer than Switzerland and Nigeria – than Norway.

Georgia’s population amounts to 3.7 million, Latvia’s to 1.8 million and Iceland’s is ten-times smaller at 375,000. The rankings substantially change when calculating the GNI in per-capita terms, leading Georgia to fall to the last place amongst the aforementioned countries. In this context, Georgia’s national income per capita would constitute 55% of Latvia’s, which is now second to last, 23% of Luxembourg’s, which ranks first, and 37% of the average of these six countries.

Graph 2: Gross National Income Per Capita, 2023

Source: World Bank

The poorest European Union member country is Bulgaria as of the data from 2023. Despite Georgia’s faster economic growth rate, which has helped to close the gap over the past few years, it still remains poorer than Bulgaria.

Vladimer Bozhadze referred to the EU candidate member countries in the second part of his statement. The Tbilisi City Assembly member claimed that Georgia is the top performer in this measure as well. The eight other candidates are Ukraine, Moldova, Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, Serbia and Turkey.

Turkey significantly exceeds Georgia with a GNI 43 times larger than Georgia’s when calculating country-level GNI figures. Notably, Turkey’s population exceeds 85 million, which is the primary reason for the aforementioned discrepancy, but is not the only factor. Georgia is also surpassed by Ukraine and Serbia, both of which have higher populations than the former.

Graph 3: Gross National Income in Purchasing Power Parity Terms (Billion International Dollars) of European Union Member Candidates, 2023

Source: World Bank

Georgia does not rank first in per-capita GNI calculations either. It is surpassed by Turkey, Montenegro and Serbia in this metric.

Graph 4: GNI per capita of European Union Member Candidates, 2023

Source: World Bank

One of the six countries to which Vladimer Bozhadze referred is not even a part of the European Union. Whilst Georgia indeed surpasses the six countries in terms of GNI, this is only because the population in each of these six countries is lower than in Georgia. Additionally, Georgia ranks last amongst the seven listed countries when calculating the GNI in per-capita terms. Considering the factual inaccuracies and misrepresentation of the context that could lead to misinterpretation of the data, suggesting that Georgia surpasses Iceland and Luxembourg in terms of the standard of living, FactCheck concludes that Vladimer Bozhadze’s statement is FALSE.