Georgia Economy Profile 2009

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 3% 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. 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. 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. Georgia has overcome the chronic energy shortages of the past by renovating hydropower plants and by bringing in newly available supplies from Azerbaijan. It also has an increased ability to pay for more expensive gas imports from Russia. 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. 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. 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.

GDP (purchasing power parity)

$21.51 billion (2008 est.)
$21.07 billion (2007 est.)
$18.76 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$12.87 billion (2008 est.)

GDP - real growth rate

2.1% (2008 est.)
12.3% (2007 est.)
9.4% (2006 est.)

GDP - per capita (PPP)

$4,600 (2008 est.)
$4,500 (2007 est.)
$4,000 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 12.5%
industry: 27.9%
services: 59.6% (2008 est.)

Population below poverty line

31% (2006)

Labor force

2.317 million (2007 est.)

Labor force - by occupation

agriculture: 55.6%
industry: 8.9%
services: 35.5% (2006 est.)

Unemployment rate

13.6% (2006 est.)

Household income or consumption by percentage share

lowest 10%: 2.4%
highest 10%: 27% (2005)

Distribution of family income - Gini index

40.8 (2005)
37.1 (1996)

Investment (gross fixed)

22.5% of GDP (2008 est.)

Budget

revenues: $4.596 billion
expenditures: $5.345 billion (2008 est.)

Inflation rate (consumer prices)

10% (2008 est.)
9.3% (2007 est.)

Central bank discount rate

8% (25 December 2008)
NA% (31 December 2007)
note: this is the Refinancing Rate, the key monetary policy rate of the Georgian National Bank

Commercial bank prime lending rate

NA% (31 December 2008)
20.41% (31 December 2007)

Stock of money

$972.4 million (31 December 2008)
$1.154 billion (31 December 2007)

Stock of quasi money

$1.606 billion (31 December 2008)
$1.379 billion (31 December 2007)

Stock of domestic credit

$3.754 billion (31 December 2008)
$3.374 billion (31 December 2007)

Industries

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

Industrial production growth rate

-1% (2008 est.)

Electricity - production

7.116 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 19.7%
hydro: 80.3%
nuclear: 0%
other: 0% (2001)

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 bbl/day (2007 est.)

Oil - consumption

12,980 bbl/day (2006 est.)

Oil - imports

15,820 bbl/day (2005)

Oil - exports

2,492 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.)

Current Account Balance

-$3.17 billion (2008 est.)
-$2.119 billion (2007 est.)

Agriculture - products

citrus, grapes, tea, hazelnuts, vegetables; livestock

Exports

$2.428 billion (2008 est.)
$2.088 billion (2007 est.)

Exports - commodities

scrap metal, wine, mineral water, ores, vehicles, fruits and nuts

Exports - partners

Turkey 19.3%, Bulgaria 17.9%, US 9%, Germany 5.2%, Canada 4.9%, UK 4.3%, Azerbaijan 4.3% (2008)

Imports

$6.261 billion (2008 est.)
$4.984 billion (2007 est.)

Imports - commodities

fuels, vehicles, machinery and parts, grain and other foods, pharmaceuticals

Imports - partners

Turkey 15.1%, Russia 10.9%, US 8.9%, Ukraine 7.1%, Germany 5.9%, Azerbaijan 5.6%, Bulgaria 4.5%, China 4.3% (2008)

Reserves of foreign exchange and gold

$1.48 billion (31 December 2008 est.)
$1.361 billion (31 December 2007 est.)

Debt - external

$7.711 billion (31 December 2008)
$5.343 billion (31 December 2007)

Market value of publicly traded shares

$NA (31 December 2008)
$1.389 billion (31 December 2007)
$668.3 million (31 December 2006)

Economic aid - recipient

ODA, $309.8 million (2005 est.)

Currency (code)

GEL

Currency (code)

lari (GEL)

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

calendar year