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Georgia: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
Georgia has an economy in transition, influenced by all the years of Soviet domination. Its relationships with its Caucasian neighbors, especially Russia, are sometimes sources of instability, as it was shown by the conflict in August 2008 in South Ossetia and in Abkhazia.
The war, along with the global crisis, explains the investors' flight and the fall of the GDP, which was compensated in a large scale by international aid. The country has to face a huge budgetary deficit and depends financially on multilateral organizations.
The government actively seeks to attract international investors offering appealing tax and legal advantages.
Georgia has a promising tertiary economy, but it is strongly dependent on its political sphere. Even when the war against corruption was effective, on a small and an intermediate scale, it still continues to taint the relationship between the business world and politics, which are often involved. The GDP was contracted by 4% in 2009.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 10.77 | 11.67e | 13.84e | 14.92 | 15.28 |
| GDP (Constant Prices, Annual % Change) | -3.8 | 6.4 | 5.5e | 5.2 | 5.0 |
| GDP per Capita (USD) | 2,455e | 2,629e | 3,098e | 3,358 | 3,460 |
| General Government Gross Debt (in % of GDP) | 37.3 | 39.1e | 36.8 | 38.0 | 38.2 |
| Inflation Rate (%) | 1.7 | 7.1e | 9.6e | 5.0 | 5.0 |
| Unemployment Rate (% of the Labor Force) | 16.9 | 16.3 | 16.2 | 16.0 | 16.0 |
| Current Account (billions USD) | -1.21 | -1.12e | -1.49e | -1.37 | -1.19 |
| Current Account (in % of GDP) | -11.2 | -9.6e | -10.8 | -7.8 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
Agriculture contributes nearly 15% to the GDP but the yield is very low. The main agricultural products are wheat, corn, barley, potatoes, citrus fruits and other fruits, tobacco, wine grapes and rice.
Georgia is rich in minerals, especially manganese (mined mainly in Chiatura and Imeritia), copper, tungsten, marble, and oil. Even though Georgia has abundant hydroelectric energy, it needs to import a significant volume of its fuel. The construction of an oil pipeline from the Caspian Sea to the center of the Black Sea at Supsa (in Georgia) is going to attract substantial foreign investment.
The industrial sector is less developed and includes mainly food processing in full expansion, manufacturing of transport equipment, electric motors, iron, steel, aircraft, chemical products and textiles. The industrial and mining sectors contribute around one third to the GDP.
The most dynamic sector is the services sector (particularly hotels, restaurants, transport and telecommunications), which contributes more than 50% to the GDP. Several beach resorts and spas that attract large numbers of tourists can be found along the Black Sea. Tourism is one of the government's priorities with the development of infrastructures in the coastal area of Adjara and ski stations in Svaneti.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 53.4 | 10.4 | 36.0 |
| Value Added (in % of GDP) | 9.8 | 21.0 | 69.2 |
| Value Added (Annual % Change) | 1.0 | -5.0 | 10.7 |
Source: World Bank - Last Available Data.
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| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Georgian Lari (GEL) - Average Annual Exchange Rate For 1 USD | 1.78 | 1.67 | 1.49 | 1.67 | 1.78 |
Source: World Bank - Last Available Data.
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Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
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Georgia is very open to international trade. It maintains no currency controls, allows foreign investment in almost all sectors and has implemented an impressive privatization plan, particularly in the allocation of land. The share of foreign trade is nearly 90%. Georgia was the second former Soviet Union country to join the WTO. However, Georgia has a negative trade balance. Its three main trade partners (both for export and import) are Russia, Turkey and the Ukraine. The main western business partner is Spain, followed by Germany. Georgia mainly exports iron, steel, wine, aircraft, fruits and hazelnuts. The main import commodities are mineral fuels, oil, vehicles, nuclear reactors and boilers, electronic equipment and pharmaceutical products.
| Foreign Trade Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Imports of Goods (million USD) | 3,678 | 5,215 | 6,302 | 4,366 | 5,097 |
| Exports of Goods (million USD) | 936 | 1,232 | 1,495 | 1,134 | 1,580 |
| Imports of Services (million USD) | 687 | 872 | 1,156 | 910 | 990 |
| Exports of Services (million USD) | 801 | 976 | 1,157 | 1,225 | 1,487 |
| Imports of Goods and Services (in % of GDP) | 57.0 | 58.0 | 58.4 | 48.9 | 53.0 |
| Exports of Goods and Services (in % of GDP) | 32.9 | 31.2 | 28.6 | 29.5 | 33.8 |
| Trade Balance (million USD) | -2,019 | -2,896 | -3,836 | -2,399 | -2,572 |
| Trade Balance (Including Service) (million USD) | -1,862 | -2,735 | -3,815 | -2,059 | -2,038 |
| Foreign Trade (in % of GDP) | 89.9 | 89.2 | 87.0 | 78.4 | 86.9 |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| Azerbaijan | 15.4% |
| Turkey | 13.6% |
| United States | 11.4% |
| Armenia | 10.1% |
| Ukraine | 6.5% |
| See More Countries | 42.9% |
| Main Suppliers (% of Imports) |
2010 |
| Turkey | 17.3% |
| Ukraine | 10.9% |
| Azerbaijan | 9.1% |
| China | 6.5% |
| Germany | 6.5% |
| See More Countries | 49.6% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
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Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Map of freedom 2010
Source: Freedom House
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Last Updates: February 2012