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Georgia vs. Armenia

Economy

GeorgiaArmenia
Economy - overviewGeorgia'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 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 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 the period 2010-17, 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 continued effort 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, increased tax enforcement, and cracked down on petty corruption, leading to higher revenues. Georgia plans to improve the domestic investment environment through a four-year economic plan targeting the tax system, educational standards, infrastructure, and governance. 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, strengthening anti-trust policy, and amending the labor code to comply with International Labor Standards. In mid-2014, Georgia signed an association agreement with the EU, paving the way to free trade and visa-free travel. Georgia is also seeking to expand trade with China, concluding substantive negotiations on a trade agreement in October 2016.
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 deteriorations 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 7-8% of GDP. Armenia joined the Russia-led Eurasian Economic Union in January 2015, but has expressed interest in expanding its economic ties with the European Union as well, and in March 2017 an EU-Armenia Comprehensive and Enhanced Partnership Agreement was initiated. Armenia’s rising government debt is leading Yerevan to tighten its fiscal policies – the debt almost reached the debt to GDP threshold set by national legislation as of March 2017.
GDP (purchasing power parity)$39.32 billion (2017 est.)
$37.82 billion (2016 est.)
$36.81 billion (2015 est.)
note: data are in 2017 dollars
$27.21 billion (2017 est.)
$26.28 billion (2016 est.)
$26.23 billion (2015 est.)
note: data are in 2017 dollars
GDP - real growth rate4% (2017 est.)
2.7% (2016 est.)
2.9% (2015 est.)
3.5% (2017 est.)
0.2% (2016 est.)
3.3% (2015 est.)
GDP - per capita (PPP)$10,600 (2017 est.)
$10,200 (2016 est.)
$9,900 (2015 est.)
note: data are in 2017 dollars
$9,100 (2017 est.)
$8,800 (2016 est.)
$8,800 (2015 est.)
note: data are in 2017 dollars
GDP - composition by sectoragriculture: 9.6%
industry: 23.4%
services: 66.2% (2017 est.)
agriculture: 17.7%
industry: 27.8%
services: 54.5% (2017 est.)
Population below poverty line9.2% (2010 est.)
32% (2013 est.)
Household income or consumption by percentage sharelowest 10%: 2%
highest 10%: 31.3% (2008)
lowest 10%: 3.5%
highest 10%: 25.7% (2014)
Inflation rate (consumer prices)6% (2017 est.)
2.1% (2016 est.)
1.9% (2017 est.)
-1.4% (2016 est.)
Labor force1.998 million (2016 est.)
1.507 million (2017 est.)
Labor force - by occupationagriculture: 55.6%
industry: 8.9%
services: 35.5% (2006 est.)
agriculture: 36.3%
industry: 17%
services: 46.7% (2013 est.)
Unemployment rate11.5% (2017 est.)
11.8% (2016 est.)
18.9% (2017 est.)
18.8% (2016 est.)
Distribution of family income - Gini index40.1 (2014)
46 (2011)
31.5 (2014)
31.5 (2013 est.)
Budgetrevenues: $4.26 billion
expenditures: $4.852 billion (2017 est.)
revenues: $2.536 billion
expenditures: $2.91 billion (2017 est.)
Industriessteel, machine tools, electrical appliances, mining (manganese, copper, gold), chemicals, wood products, wine
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
Industrial production growth rate7% (2017 est.)
5% (2017 est.)
Agriculture - productscitrus, grapes, tea, hazelnuts, vegetables; livestock
fruit (especially grapes and apricots), vegetables; livestock
Exports$3.533 billion (2017 est.)
$2.831 billion (2016 est.)
$2.233 billion (2017 est.)
$1.891 billion (2016 est.)
Exports - commoditiesvehicles, ferro-alloys, fertilizers, nuts, scrap metal, gold, copper ores
unwrought copper, pig iron, nonferrous metals, gold, diamonds, mineral products, foodstuffs, brandy, cigarettes, energy
Exports - partnersRussia 9.8%, Turkey 8.2%, China 8.1%, Bulgaria 7.3%, Azerbaijan 7.3%, Armenia 7.2%, Germany 4.1% (2016)
Russia 21%, Bulgaria 8.7%, Georgia 8.1%, Canada 7.9%, Germany 7.9%, Iraq 7.8%, China 5.7%, Iran 4.2%, Switzerland 4.2% (2016)
Imports$7.846 billion (2017 est.)
$6.64 billion (2016 est.)
$3.361 billion (2017 est.)
$2.835 billion (2016 est.)
Imports - commoditiesfuels, vehicles, machinery and parts, grain and other foods, pharmaceuticals
natural gas, petroleum, tobacco products, foodstuffs, diamonds, pharmaceuticals, cars
Imports - partnersCanada 18.6%, Turkey 14%, Russia 7%, Ireland 6.5%, China 5.7%, Azerbaijan 5.1%, Germany 4.4%, Ukraine 4.3% (2016)
Russia 30.7%, China 11%, Iran 5.1%, Turkey 5%, Germany 5% (2016)
Debt - external$14.15 billion (31 December 2017 est.)
$14.08 billion (31 December 2016 est.)
$9.17 billion (31 December 2017 est.)
$8.987 billion (31 December 2016 est.)
Exchange rateslaris (GEL) per US dollar -
2.535 (2017 est.)
2.3668 (2016 est.)
2.3668 (2015 est.)
2.2694 (2014 est.)
1.7657 (2013 est.)
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.)
Fiscal yearcalendar year
calendar year
Public debt44.2% of GDP (2017 est.)
44.5% of GDP (2016 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 not maintain intra-governmental debt or social funds
56.7% of GDP (2017 est.)
56.5% of GDP (2016 est.)
Reserves of foreign exchange and gold$2.945 billion (31 December 2017 est.)
$2.756 billion (31 December 2016 est.)
$2.242 billion (31 December 2017 est.)
$2.204 billion (31 December 2016 est.)
Current Account Balance-$1.811 billion (2017 est.)
-$1.91 billion (2016 est.)
-$398 million (2017 est.)
-$238 million (2016 est.)
GDP (official exchange rate)$15.23 billion (2016 est.)
$11.04 billion (2016 est.)
Stock of direct foreign investment - at home$16.2 billion (31 December 2017 est.)
$14.66 billion (31 December 2016 est.)
$4.169 billion (2015 est.)
$4.087 billion (2014 est.)
Stock of direct foreign investment - abroad$2.505 billion (31 December 2017 est.)
$2.185 billion (31 December 2016 est.)
$228 million (2015 est.)
$215 million (2014 est.)
Market value of publicly traded shares$1.155 billion (31 December 2015 est.)
$943.4 million (31 December 2012 est.)
$795.7 million (31 December 2011 est.)
$132.1 million (31 December 2012 est.)
$139.6 million (31 December 2011 est.)
$144.8 million (31 December 2010 est.)
Central bank discount rate6.5% (7 Setpember 2016)
7% (23 September 2015)
note: this is the Refinancing Rate, the key monetary policy rate of the National Bank of Georgia
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
Commercial bank prime lending rate11.5% (31 December 2017 est.)
12.62% (31 December 2016 est.)
16% (31 December 2017 est.)
17.36% (31 December 2016 est.)
note: average lending rate on loans up to one year
Stock of domestic credit$7.179 billion (31 December 2017 est.)
$7.753 billion (31 December 2016 est.)
$6.616 billion (31 December 2017 est.)
$5.689 billion (31 December 2016 est.)
Stock of narrow money$2.203 billion (31 December 2017 est.)
$2.389 billion (31 December 2016 est.)
$1.514 billion (31 December 2017 est.)
$1.355 billion (31 December 2016 est.)
Stock of broad money$2.419 billion (31 December 2017 est.)
$2.454 billion (31 December 2016 est.)
$2.563 billion (31 December 2017 est.)
$2.219 billion (31 December 2016 est.)
Taxes and other revenues28% of GDP (2017 est.)
23% of GDP (2017 est.)
Budget surplus (+) or deficit (-)-3.9% of GDP (2017 est.)
-3.4% of GDP (2017 est.)
Unemployment, youth ages 15-24total: 35.6%
male: 28.6%
female: 30.8% (2015 est.)
total: 32.5%
male: 28.6%
female: 37.2% (2013 est.)
GDP - composition, by end usehousehold consumption: 63.4%
government consumption: 18.6%
investment in fixed capital: 29.7%
investment in inventories: 3.4%
exports of goods and services: 52.5%
imports of goods and services: -67.6% (2017 est.)
household consumption: 76.6%
government consumption: 13.1%
investment in fixed capital: 17.9%
investment in inventories: 3%
exports of goods and services: 37.3%
imports of goods and services: -47.9% (2017 est.)
Gross national saving21.8% of GDP (2017 est.)
19.1% of GDP (2016 est.)
20.1% of GDP (2015 est.)
17.4% of GDP (2017 est.)
17% of GDP (2016 est.)
18.4% of GDP (2015 est.)

Source: CIA Factbook