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Georgia: Economy#

Georgia's main economic activities include cultivation of agricultural products such as grapes, citrus fruits, and hazelnuts; mining of manganese, copper, and gold; and producing alcoholic and nonalcoholic beverages, metals, machinery, and chemicals in small-scale industries. The country imports nearly all of its needed supplies of natural gas and oil products. It has sizeable hydropower capacity that now provides most of its energy needs.

Georgia has overcome the chronic energy shortages and gas supply interruptions of the past by renovating hydropower plants and by increasingly relying on natural gas imports from Azerbaijan instead of from Russia. Construction of the Baku-T'bilisi-Ceyhan oil pipeline, the South Caucasus 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. The expansion of the South Caucasus pipeline, as part of the Shah Deniz II Southern Gas Corridor project, will result in a $2 billion foreign investment in Georgia, the largest ever in the country. Gas from Shah Deniz II is expected to begin flowing in 2019.

Georgia's economy sustained GDP growth of more than 10% in 2006-07, based on strong inflows of foreign investment and robust government spending. However, GDP growth slowed following the August 2008 conflict with Russia, and sunk to negative 4% in 2009 as foreign direct investment and workers' remittances declined in the wake of the global financial crisis. The economy rebounded in 2010-13, but FDI inflows, the engine of Georgian economic growth prior to the 2008 conflict, have not recovered fully. Unemployment has also remained high.

The country is pinning its hopes for renewed growth on a determined effort to continue to liberalize the economy by reducing regulation, taxes, and corruption in order to attract foreign investment, with a focus on hydropower, agriculture, tourism, and textiles production. Georgia has historically suffered from a chronic failure to collect tax revenues; however, since 2004 the government has simplified the tax code, improved tax administration, increased tax enforcement, and cracked down on petty corruption, leading to higher revenues. The government has received high marks from the World Bank for its anti-corruption efforts. Since 2012, the Georgian Dream-led government has continued the previous administration's low-regulation, low-tax, free market policies, while modestly increasing social spending, strengthening anti-trust policy, and amending the labor code to comply with International Labor Standards. The government published its 2020 Economic Development Strategy in early 2014 and former Prime Minister Bidzina IVANISHVILI launched the Georgian Co-Investment Fund, a $6 billion private equity fund that will invest in tourism, agriculture, logistics, energy, infrastructure, and manufacturing. In mid-2014, Georgia signed an association agreement with the EU, paving the way to free trade and visa-free travel.

Economic Facts#

GDP (purchasing power parity)$37.38 billion (2016 est.)
$36.15 billion (2015 est.)
$35.17 billion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$14.46 billion (2015 est.)
GDP - real growth rate3.4% (2016 est.)
2.8% (2015 est.)
4.6% (2014 est.)
GDP - per capita (PPP)$10,100 (2016 est.)
$9,700 (2015 est.)
$9,400 (2014 est.)
note: data are in 2016 dollars
Gross national saving21.3% of GDP (2016 est.)
20.4% of GDP (2015 est.)
19.2% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 66.9%
government consumption: 16%
investment in fixed capital: 26.8%
investment in inventories: 3.8%
exports of goods and services: 38.1%
imports of goods and services: -51.6% (2016 est.)
GDP - composition, by sector of originagriculture: 9.2%
industry: 21.6%
services: 68.3% (2016 est.)
Agriculture - productscitrus, grapes, tea, hazelnuts, vegetables; livestock
Industriessteel, machine tools, electrical appliances, mining (manganese, copper, gold), chemicals, wood products, wine
Industrial production growth rate1.4% (2016 est.)
Labor force1.959 million (2011 est.)
Labor force - by occupationagriculture: 55.6%
industry: 8.9%
services: 35.5% (2006 est.)
Unemployment rate12.1% (2016 est.)
12% (2015 est.)
Population below poverty line9.2% (2010 est.)
Household income or consumption by percentage sharelowest 10%: 2%
highest 10%: 31.3% (2008)
Distribution of family income - Gini index46 (2011)
37.1 (1996)
Budgetrevenues: $4.266 billion
expenditures: $4.541 billion (2016 est.)
Taxes and other revenues29.5% of GDP (2016 est.)
Budget surplus (+) or deficit (-)-1.9% of GDP (2016 est.)
Public debt42.4% of GDP (2016 est.)
41.4% of GDP (2015 est.)
note: data cover general government debt, and includes debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities; Georgia does
Fiscal yearcalendar year
Inflation rate (consumer prices)2% (2016 est.)
4% (2015 est.)
Central bank discount rate3.75% (15 January 2013)
5.25% (31 December 2012)
note: this is the Refinancing Rate, the key monetary policy rate of the National Bank of Georgia
Commercial bank prime lending rate12.9% (31 December 2016 est.)
12.49% (31 December 2015 est.)
Stock of narrow money$2.165 billion (31 December 2016 est.)
$2.063 billion (31 December 2015 est.)
Stock of broad money$2.67 billion (31 December 2016 est.)
$2.402 billion (31 December 2015 est.)
Stock of domestic credit$7.186 billion (31 December 2016 est.)
$6.946 billion (31 December 2015 est.)
Market value of publicly traded shares$943.4 million (31 December 2012 est.)
$795.7 million (31 December 2011 est.)
$1.06 billion (31 December 2010 est.)
Current account balance-$1.75 billion (2016 est.)
-$1.641 billion (2015 est.)
Exports$2.926 billion (2016 est.)
$3.043 billion (2015 est.)
Exports - commoditiesvehicles, ferro-alloys, fertilizers, nuts, scrap metal, gold, copper ores
Exports - partnersAzerbaijan 10.9%, Bulgaria 9.7%, Turkey 8.4%, Armenia 8.2%, Russia 7.4%, China 5.7%, US 4.7%, Uzbekistan 4.4% (2015)
Imports$6.803 billion (2016 est.)
$7.363 billion (2015 est.)
Imports - commoditiesfuels, vehicles, machinery and parts, grain and other foods, pharmaceuticals
Imports - partnersTurkey 17.2%, Russia 8.1%, China 7.6%, Azerbaijan 7%, Ireland 5.9%, Ukraine 5.9%, Germany 5.6% (2015)
Reserves of foreign exchange and gold$2.855 billion (31 December 2016 est.)
$2.521 billion (31 December 2015 est.)
Debt - external$13.65 billion (31 December 2016 est.)
$13.31 billion (31 December 2015 est.)
Stock of direct foreign investment - at home$13.68 billion (31 December 2016 est.)
$12.64 billion (31 December 2015 est.)
Stock of direct foreign investment - abroad$1.933 billion (31 December 2016 est.)
$1.773 billion (31 December 2015 est.)
Exchange rateslaris (GEL) per US dollar -
2.18 (2016 est.)
2.2694 (2015 est.)
2.2694 (2014 est.)
1.7657 (2013 est.)
1.65 (2012 est.)