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The Economy of Georgia

Georgian Economy

Georgia's map

Economy - overview: Georgia's economy sustained GDP growth of close to 10% in 2006 and 12% in 2007, based on strong inflows of foreign investment and robust government spending. However, growth slowed to less than 7% in 2008 and is expected to slow further in 2009. Georgia's main economic activities include the cultivation of agricultural products such as grapes, citrus fruits, and hazelnuts; mining of manganese and copper; and output of a small industrial sector producing alcoholic and nonalcoholic beverages, metals, machinery, aircraft and chemicals. The country imports nearly all its needed supplies of natural gas and oil products. It has sizeable hydropower capacity, a growing component of its energy supplies. Areas of recent improvement include growth in the construction, banking services, and mining sectors, but reduced availability of external investment and the slowing regional economy are emerging risks. Georgia has historically suffered from a chronic failure to collect tax revenues; however, the government has made great progress and has reformed the tax code, improved tax administration, increased tax enforcement, and cracked down on corruption since coming to power in 2004. Government revenues have increased nearly four fold since 2003. Due to improvements in customs and tax enforcement, smuggling is a declining problem. Georgia has overcome the chronic energy shortages of the past by renovating hydropower plants and by bringing in newly available natural gas supplies from Azerbaijan, signing a Memorandum of Understanding and gas supply agreements in Fall 2008. It also has an increased ability to pay for more expensive gas imports from Russia. The country is pinning its hopes for long-term growth on a determined effort to reduce regulation, taxes, and corruption in order to attract foreign investment, but the economy faces a more difficult investment climate both domestically and internationally. The construction on the Baku-T'bilisi-Ceyhan oil pipeline, the Baku-T'bilisi-Erzerum gas pipeline, and the Kars-Akhalkalaki Railroad are part of a strategy to capitalize on Georgia's strategic location between Europe and Asia and develop its role as a transit point for gas, oil and other goods.

GDP:

GDP - real growth rate: 2.4% (2008 est.) 12.4% (2007 est.) 9.4% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 12.8% industry: 28.4% services: 58.8% (2008 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 2.4% highest 10%: 27% (2005)

Distribution of family income - Gini index: 40.8 (2005)

Inflation rate (consumer prices):

Labor force: 2.02 million (2007 est.)

Labor force - by occupation: agriculture: 55.6% industry: 8.9% services: 35.5% (2006 est.)

Unemployment rate: 13.6% (2006 est.)

Budget: revenues: $3.778 billion expenditures: $4.182 billion (2008 est.)

Industries: steel, aircraft, machine tools, electrical appliances, mining (manganese and copper), chemicals, wood products, wine

Industrial production growth rate: 6% (2008 est.)

Electricity - production: 7.116 billion kWh (2006 est.)

Electricity - production by source:

Electricity - consumption: 6.694 billion kWh (2006 est.)

Electricity - exports: 635 million kWh (2007 est.)

Electricity - imports: 532 million kWh (2007 est.)

Oil - production: 979.1 bbl/day (2007 est.)

Oil - consumption: 12,980 bbl/day (2006 est.)

Oil - exports: 2,492 bbl/day (2005)

Oil - imports: 15,820 bbl/day (2005)

Oil - proved reserves: 35 million bbl (1 January 2008 est.)

Natural gas - production: 10 million cu m (2007 est.)

Natural gas - consumption: 1.49 billion cu m (2007 est.)

Natural gas - exports: 0 cu m (2007 est.)

Natural gas - imports: 1.48 billion cu m (2007 est.)

Natural gas - proved reserves: 8.495 billion cu m (1 January 2008 est.)

Agriculture - products: citrus, grapes, tea, hazelnuts, vegetables; livestock

Exports: $2.761 billion (2008 est.)

Exports - commodities: scrap metal, wine, mineral water, ores, vehicles, fruits and nuts

Exports - partners: Turkey 13%, US 11.2%, Azerbaijan 6.3%, UK 5.4%, Bulgaria 5.1%, Ukraine 5%, Armenia 4.8%, Turkmenistan 4.5%, Canada 4.2% (2007)

Imports: $7.304 billion f.o.b. (2008 est.)

Imports - commodities: fuels, vehicles, machinery and parts, grain and other foods, pharmaceuticals

Imports - partners: Turkey 14%, Russia 12.3%, Ukraine 8.5%, Azerbaijan 7.3%, Germany 6.8%, US 5%, Bulgaria 4.6% (2007)

Debt - external: $4.5 billion (2007)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: laris (GEL) per US dollar - 1.47 (2008 est.), 1.7 (2007), 1.78 (2006), 1.8127 (2005), 1.9167 (2004)

Fiscal year: