Russia vs. Georgia


Economy - overview

Russia has undergone significant changes since the collapse of the Soviet Union, moving from a centrally planned economy towards a more market-based system. Both economic growth and reform have stalled in recent years, however, and Russia remains a predominantly statist economy with a high concentration of wealth in officials' hands. Economic reforms in the 1990s privatized most industry, with notable exceptions in the energy, transportation, banking, and defense-related sectors. The protection of property rights is still weak, and the state continues to interfere in the free operation of the private sector.

Russia is one of the world's leading producers of oil and natural gas, and is also a top exporter of metals such as steel and primary aluminum. Russia is heavily dependent on the movement of world commodity prices as reliance on commodity exports makes it vulnerable to boom and bust cycles that follow the volatile swings in global prices. The economy, which had averaged 7% growth during the 1998-2008 period as oil prices rose rapidly, has seen diminishing growth rates since then due to the exhaustion of Russia’s commodity-based growth model.

A combination of falling oil prices, international sanctions, and structural limitations pushed Russia into a deep recession in 2015, with GDP falling by close to 2.8%. The downturn continued through 2016, with GDP contracting another 0.2%, but was reversed in 2017 as world demand picked up. Government support for import substitution has increased recently in an effort to diversify the economy away from extractive industries.

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)$3,968,180,000,000 (2019 est.)

$3,915,637,000,000 (2018 est.)

$3,818,780,000,000 (2017 est.)

note: data are in 2010 dollars
$55.776 billion (2019 est.)

$53.129 billion (2018 est.)

$50.662 billion (2017 est.)

note: data are in 2017 dollars
GDP - real growth rate1.34% (2019 est.)

2.54% (2018 est.)

1.83% (2017 est.)
5% (2017 est.)

2.8% (2016 est.)

2.9% (2015 est.)
GDP - per capita (PPP)$27,044 (2019 est.)

$26,668 (2018 est.)

$26,006 (2017 est.)

note: data are in 2010 dollars
$14,992 (2019 est.)

$14,257 (2018 est.)

$13,590 (2017 est.)

note: data are in 2017 dollars
GDP - composition by sectoragriculture: 4.7% (2017 est.)

industry: 32.4% (2017 est.)

services: 62.3% (2017 est.)
agriculture: 8.2% (2017 est.)

industry: 23.7% (2017 est.)

services: 67.9% (2017 est.)
Population below poverty line12.6% (2018 est.)19.5% (2019 est.)
Household income or consumption by percentage sharelowest 10%: 2.3%

highest 10%: 32.2% (2012 est.)
lowest 10%: 2%

highest 10%: 31.3% (2008)
Inflation rate (consumer prices)4.4% (2019 est.)

2.8% (2018 est.)

3.7% (2017 est.)
4.8% (2019 est.)

2.6% (2018 est.)

6% (2017 est.)
Labor force69.923 million (2020 est.)686,000 (2019 est.)
Labor force - by occupationagriculture: 9.4%

industry: 27.6%

services: 63% (2016 est.)
agriculture: 55.6%

industry: 8.9%

services: 35.5% (2006 est.)
Unemployment rate4.6% (2019 est.)

4.8% (2018 est.)
11.8% (2016 est.)
Distribution of family income - Gini index37.5 (2018 est.)

41.9 (2013)
36.4 (2018 est.)

46 (2011)
Budgetrevenues: 258.6 billion (2017 est.)

expenditures: 281.4 billion (2017 est.)
revenues: 4.352 billion (2017 est.)

expenditures: 4.925 billion (2017 est.)
Industriescomplete range of mining and extractive industries producing coal, oil, gas, chemicals, and metals; all forms of machine building from rolling mills to high-performance aircraft and space vehicles; defense industries (including radar, missile production, advanced electronic components), shipbuilding; road and rail transportation equipment; communications equipment; agricultural machinery, tractors, and construction equipment; electric power generating and transmitting equipment; medical and scientific instruments; consumer durables, textiles, foodstuffs, handicraftssteel, machine tools, electrical appliances, mining (manganese, copper, gold), chemicals, wood products, wine
Industrial production growth rate-1% (2017 est.)6.7% (2017 est.)
Agriculture - productswheat, sugar beet, milk, potatoes, barley, sunflower seed, maize, poultry, oats, soybeansmilk, grapes, maize, potatoes, wheat, watermelons, tomatoes, tangerines/mandarins, barley, apples
Exports$551.128 billion (2019 est.)

$564.314 billion (2018 est.)

$534.657 billion (2017 est.)
$3.566 billion (2017 est.)

$2.831 billion (2016 est.)
Exports - commoditiescrude petroleum, refined petroleum, natural gas, coal, wheat, iron (2019)copper, cars, iron alloys, wine, packaged medicines (2019)
Exports - partnersChina 14%, Netherlands 10%, Belarus 5%, Germany 5% (2019)Russia 12%, Azerbaijan 12%, Armenia 9%, Bulgaria 8%, China 6%, Turkey 6%, Ukraine 6% (2019)
Imports$366.919 billion (2019 est.)

$355.022 billion (2018 est.)

$345.926 billion (2017 est.)
$7.415 billion (2017 est.)

$6.747 billion (2016 est.)
Imports - commoditiescars and vehicle parts, packaged medicines, broadcasting equipment, aircraft, computers (2019)cars, refined petroleum, copper, packaged medicines, natural gas (2019)
Imports - partnersChina 20%, Germany 13%, Belarus 6% (2019)Turkey 17%, China 11%, Russia 9%, Azerbaijan 6%, United States 6%, Germany 5% (2019)
Debt - external$479.844 billion (2019 est.)

$484.355 billion (2018 est.)
$18.149 billion (2019 est.)

$17.608 billion (2018 est.)
Exchange ratesRussian rubles (RUB) per US dollar -

73.7569 (2020 est.)

63.66754 (2019 est.)

66.2 (2018 est.)

60.938 (2014 est.)

38.378 (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 yearcalendar yearcalendar year
Public debt15.5% of GDP (2017 est.)

16.1% 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, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment, debt instruments for the social funds are not sold at public auctions
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$432.7 billion (31 December 2017 est.)

$377.7 billion (31 December 2016 est.)
$3.039 billion (31 December 2017 est.)

$2.756 billion (31 December 2016 est.)
Current Account Balance$65.311 billion (2019 est.)

$115.68 billion (2018 est.)
-$1.348 billion (2017 est.)

-$1.84 billion (2016 est.)
GDP (official exchange rate)$1,702,361,000,000 (2019 est.)$17.694 billion (2019 est.)
Taxes and other revenues16.4% (of GDP) (2017 est.)28.7% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-1.4% (of GDP) (2017 est.)-3.8% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 15.2%

male: 14.8%

female: 15.6% (2019 est.)
total: 30.4%

male: 28.9%

female: 32.9% (2019 est.)
GDP - composition, by end usehousehold consumption: 52.4% (2017 est.)

government consumption: 18% (2017 est.)

investment in fixed capital: 21.6% (2017 est.)

investment in inventories: 2.3% (2017 est.)

exports of goods and services: 26.2% (2017 est.)

imports of goods and services: -20.6% (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 saving27.6% of GDP (2019 est.)

30% of GDP (2018 est.)

25.7% of GDP (2017 est.)
22% of GDP (2019 est.)

21.3% of GDP (2018 est.)

19.2% of GDP (2017 est.)

Source: CIA Factbook