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Armenia vs. Georgia

Economy

ArmeniaGeorgia
Economy - overview

Under the old Soviet central planning system, Armenia developed a modern industrial sector, supplying machine tools, textiles, and other manufactured goods to sister republics, in exchange for raw materials and energy. Armenia has since switched to small-scale agriculture and away from the large agro industrial complexes of the Soviet era. Armenia has only two open trade borders - Iran and Georgia - because its borders with Azerbaijan and Turkey have been closed since 1991 and 1993, respectively, as a result of Armenia's ongoing conflict with Azerbaijan over the separatist Nagorno-Karabakh region.

Armenia joined the World Trade Organization in January 2003. The government has made some improvements in tax and customs administration in recent years, but anti-corruption measures have been largely ineffective. Armenia will need to pursue additional economic reforms and strengthen the rule of law in order to raise its economic growth and improve economic competitiveness and employment opportunities, especially given its economic isolation from Turkey and Azerbaijan.

Armenia's geographic isolation, a narrow export base, and pervasive monopolies in important business sectors have made it particularly vulnerable to volatility in the global commodity markets and the economic challenges in Russia. Armenia is particularly dependent on Russian commercial and governmental support, as most key Armenian infrastructure is Russian-owned and/or managed, especially in the energy sector. Remittances from expatriates working in Russia are equivalent to about 12-14% of GDP. Armenia joined the Russia-led Eurasian Economic Union in January 2015, but has remained interested in pursuing closer ties with the EU as well, signing a Comprehensive and Enhanced Partnership Agreement with the EU in November 2017. Armenia’s rising government debt is leading Yerevan to tighten its fiscal policies – the amount is approaching the debt to GDP ratio threshold set by national legislation.

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 electricity 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-Tbilisi-Ceyhan oil pipeline, the South Caucasus gas pipeline, and the Baku-Tbilisi-Kars railroad are part of a strategy to capitalize on Georgia's strategic location between Europe and Asia and develop its role as a transit hub for gas, oil, and other goods.

Georgia's economy sustained GDP growth of more than 10% in 2006-07, based on strong inflows of foreign investment, remittances, and robust government spending. However, GDP growth slowed following the August 2008 conflict with Russia, and sank 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 the period 2010-17, but FDI inflows, the engine of Georgian economic growth prior to the 2008 conflict, have not recovered fully. Unemployment remains persistently high.

The country is pinning its hopes for faster growth on a continued effort to build up infrastructure, enhance support for entrepreneurship, simplify regulations, and improve professional education, in order to attract foreign investment and boost employment, with a focus on transportation projects, tourism, hydropower, and agriculture. Georgia had historically suffered from a chronic failure to collect tax revenues; however, since 2004 the government has simplified the tax code, increased tax enforcement, and cracked down on petty corruption, leading to higher revenues. The government has received high marks from the World Bank for improvements in business transparency. 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 and amending the labor code to comply with International Labor Standards. In mid-2014, Georgia concluded an association agreement with the EU, paving the way to free trade and visa-free travel. In 2017, Georgia signed Free Trade Agreement (FTA) with China as part of Tbilisi’s efforts to diversify its economic ties. Georgia is seeking to develop its Black Sea ports to further facilitate East-West trade.

GDP (purchasing power parity)
$28.34 billion (2017 est.)
$26.37 billion (2016 est.)
$26.3 billion (2015 est.)

note: data are in 2017 dollars

$39.85 billion (2017 est.)
$37.96 billion (2016 est.)
$36.91 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
7.5% (2017 est.)
0.3% (2016 est.)
3.3% (2015 est.)
5% (2017 est.)
2.8% (2016 est.)
2.9% (2015 est.)
GDP - per capita (PPP)
$9,500 (2017 est.)
$8,800 (2016 est.)
$8,800 (2015 est.)

note: data are in 2017 dollars

$10,700 (2017 est.)
$10,300 (2016 est.)
$9,900 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 16.7% (2017 est.)
industry: 28.2% (2017 est.)
services: 54.8% (2017 est.)
agriculture: 8.2% (2017 est.)
industry: 23.7% (2017 est.)
services: 67.9% (2017 est.)
Population below poverty line
32% (2013 est.)
9.2% (2010 est.)
Household income or consumption by percentage share
lowest 10%: 3.5%
highest 10%: 25.7% (2014)
lowest 10%: 2%
highest 10%: 31.3% (2008)
Inflation rate (consumer prices)
0.9% (2017 est.)
-1.4% (2016 est.)
6% (2017 est.)
2.1% (2016 est.)
Labor force
1.507 million (2017 est.)
1.998 million (2016 est.)
Labor force - by occupation
agriculture: 36.3%
industry: 17%
services: 46.7% (2013 est.)
agriculture: 55.6%
industry: 8.9%
services: 35.5% (2006 est.)
Unemployment rate
18.9% (2017 est.)
18.8% (2016 est.)
NA% (2017 est.)
11.8% (2016 est.)
Distribution of family income - Gini index
31.5 (2014)
31.5 (2013 est.)
40.1 (2014)
46 (2011)
Budget
revenues: 2.644 billion (2017 est.)
expenditures: 3.192 billion (2017 est.)
revenues: 4.352 billion (2017 est.)
expenditures: 4.925 billion (2017 est.)
Industries
brandy, mining, diamond processing, metal-cutting machine tools, forging and pressing machines, electric motors, knitted wear, hosiery, shoes, silk fabric, chemicals, trucks, instruments, microelectronics, jewelry, software, food processing
steel, machine tools, electrical appliances, mining (manganese, copper, gold), chemicals, wood products, wine
Industrial production growth rate
5.4% (2017 est.)
6.7% (2017 est.)
Agriculture - products
fruit (especially grapes and apricots), vegetables; livestock
citrus, grapes, tea, hazelnuts, vegetables; livestock
Exports
$2.361 billion (2017 est.)
$1.891 billion (2016 est.)
$3.566 billion (2017 est.)
$2.831 billion (2016 est.)
Exports - commodities
unwrought copper, pig iron, nonferrous metals, gold, diamonds, mineral products, foodstuffs, brandy, cigarettes, energy
vehicles, ferro-alloys, fertilizers, nuts, scrap metal, gold, copper ores
Exports - partners
Russia 24.2%, Bulgaria 12.8%, Switzerland 12%, Georgia 6.9%, Germany 5.9%, China 5.5%, Iraq 5.4%, UAE 4.6%, Netherlands 4.1% (2017)
Russia 14.5%, Azerbaijan 10%, Turkey 7.9%, Armenia 7.7%, China 7.6%, Bulgaria 6.6%, Ukraine 4.6%, US 4.5% (2017)
Imports
$3.771 billion (2017 est.)
$2.835 billion (2016 est.)
$7.415 billion (2017 est.)
$6.747 billion (2016 est.)
Imports - commodities
natural gas, petroleum, tobacco products, foodstuffs, diamonds, pharmaceuticals, cars
fuels, vehicles, machinery and parts, grain and other foods, pharmaceuticals
Imports - partners
Russia 28%, China 11.5%, Turkey 5.5%, Germany 4.9%, Iran 4.3% (2017)
Turkey 17.2%, Russia 9.9%, China 9.2%, Azerbaijan 7.6%, Ukraine 5.6%, Germany 5.4% (2017)
Debt - external
$10.41 billion (31 December 2017 est.)
$8.987 billion (31 December 2016 est.)
$16.99 billion (31 December 2017 est.)
$14.08 billion (31 December 2016 est.)
Exchange rates
drams (AMD) per US dollar -
487.9 (2017 est.)
480.49 (2016 est.)
480.49 (2015 est.)
477.92 (2014 est.)
415.92 (2013 est.)
laris (GEL) per US dollar -
2.535 (2017 est.)
2.3668 (2016 est.)
2.3668 (2015 est.)
2.2694 (2014 est.)
1.7657 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
53.5% of GDP (2017 est.)
51.9% of GDP (2016 est.)
44.9% of GDP (2017 est.)
44.4% of GDP (2016 est.)

note: data cover general government debt and include 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 not maintain intragovernmental debt or social funds

Reserves of foreign exchange and gold
$2.314 billion (31 December 2017 est.)
$2.204 billion (31 December 2016 est.)
$3.039 billion (31 December 2017 est.)
$2.756 billion (31 December 2016 est.)
Current Account Balance
-$328 million (2017 est.)
-$238 million (2016 est.)
-$1.348 billion (2017 est.)
-$1.84 billion (2016 est.)
GDP (official exchange rate)
$11.54 billion (2017 est.)
$15.16 billion (2017 est.)
Stock of direct foreign investment - at home
$4.169 billion (2015 est.)
$4.087 billion (31 December 2014 est.)
$17.47 billion (31 December 2017 est.)
$14.66 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$228 million (2015 est.)
$215 million (2014 est.)
$2.477 billion (31 December 2017 est.)
$2.185 billion (31 December 2016 est.)
Market value of publicly traded shares
$132.1 million (31 December 2012 est.)
$139.6 million (31 December 2011 est.)
$144.8 million (31 December 2010 est.)
$1.155 billion (31 December 2015 est.)
$943.4 million (31 December 2012 est.)
$795.7 million (31 December 2011 est.)
Central bank discount rate
6.5% (14 December 2016)
10.5% (10 February 2015)

note: this is the Refinancing Rate, the key monetary policy instrument of the Armenian National Bank

7% (23 September 2015)
6.5% (7)

note: this is the Refinancing Rate, the key monetary policy rate of the National Bank of Georgia

Commercial bank prime lending rate
14.41% (31 December 2017 est.)
17.36% (31 December 2016 est.)

note: average lending rate on loans up to one year

11.49% (31 December 2017 est.)
12.62% (31 December 2016 est.)
Stock of domestic credit
$6.712 billion (31 December 2017 est.)
$5.689 billion (31 December 2016 est.)
$8.961 billion (31 December 2017 est.)
$7.753 billion (31 December 2016 est.)
Stock of narrow money
$1.629 billion (31 December 2017 est.)
$1.355 billion (31 December 2016 est.)
$2.301 billion (31 December 2017 est.)
$1.933 billion (31 December 2016 est.)
Stock of broad money
$1.629 billion (31 December 2017 est.)
$1.355 billion (31 December 2016 est.)
$2.301 billion (31 December 2017 est.)
$1.933 billion (31 December 2016 est.)
Taxes and other revenues
22.9% (of GDP) (2017 est.)
28.7% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-4.8% (of GDP) (2017 est.)
-3.8% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 36.3%
male: 29.5%
female: 45.7% (2016 est.)
total: 30.5%
male: 26.3%
female: 32.7% (2017 est.)
GDP - composition, by end use
household consumption: 76.7% (2017 est.)
government consumption: 14.2% (2017 est.)
investment in fixed capital: 17.3% (2017 est.)
investment in inventories: 4.1% (2017 est.)
exports of goods and services: 38.1% (2017 est.)
imports of goods and services: -50.4% (2017 est.)
household consumption: 62.8% (2017 est.)
government consumption: 17.1% (2017 est.)
investment in fixed capital: 29.5% (2017 est.)
investment in inventories: 2.4% (2017 est.)
exports of goods and services: 50.4% (2017 est.)
imports of goods and services: -62.2% (2017 est.)
Gross national saving
17.8% of GDP (2017 est.)
16.6% of GDP (2016 est.)
18.4% of GDP (2015 est.)
23% of GDP (2017 est.)
19.9% of GDP (2016 est.)
19.5% of GDP (2015 est.)

Source: CIA Factbook