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flag Georgia Georgia: Economic and Political Outline

Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

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 2009201020112012 (e)2013 (e)
GDP (billions USD) 10.7711.67e13.84e14.9215.28
GDP (Constant Prices, Annual % Change) -3.86.45.5e5.25.0
GDP per Capita (USD) 2,455e2,629e3,098e3,3583,460
General Government Gross Debt (in % of GDP) 37.339.1e36.838.038.2
Inflation Rate (%) 1.77.1e9.6e5.05.0
Unemployment Rate (% of the Labor Force) 16.916.316.216.016.0
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

Main Sectors of Industry

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.

 

Find more information about your business sector on our service Market reports.

 
Monetary Indicators 20062007200820092010
Georgian Lari (GEL) - Average Annual Exchange Rate For 1 USD 1.781.671.491.671.78

Source: World Bank - Last Available Data.

 

Find out all the exchange rates daily on our service Currency converter.

 
Learn more about Market Analysis about Georgia on Globaltrade.net, the Directory for International Trade Services.
 

Indicator of Economic Freedom

Score:
70.4/100
Position:
Mostly free
World Rank:
27/179
Regional Rank:
14/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

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Foreign Trade in Figures

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 20062007200820092010
Imports of Goods (million USD) 3,6785,2156,3024,3665,097
Exports of Goods (million USD) 9361,2321,4951,1341,580
Imports of Services (million USD) 6878721,156910990
Exports of Services (million USD) 8019761,1571,2251,487
Imports of Goods and Services (in % of GDP) 57.058.058.448.953.0
Exports of Goods and Services (in % of GDP) 32.931.228.629.533.8
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) 89.989.287.078.486.9

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

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

 

Main Products

Main Exports
(% of Exports)
2010
Ferro-alloysFerro-alloys 16.7%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 14.4%
Ferrous waste and scrap; remelting scrap ingots of...Ferrous waste and scrap; remelting scrap ingots of iron or steel (excl. slag, scale and other waste from the production of iron or steel; radioactive waste and scrap; fragments of pigs, blocks or other primary forms of pig iron or spiegeleisen) 6.9%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 5.4%
Mineral or chemical nitrogenous fertilizers (excl....Mineral or chemical nitrogenous fertilizers (excl. those in pellet or similar forms, or in packages with a gross weight of <= 10 kg) 4.6%
See More Products 52.1%
Main Imports
(% of Imports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 13.6%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 6.1%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.7%
Wheat and meslinWheat and meslin 3.4%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 2.6%
See More Products 70.6%

Source: Comtrade, Last Available Data

 
 

To go further, check out our service Import export flows.

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Sources of General Economic Information

Ministries
Ministry of Agriculture of Georgia
Ministry of Economic Development  of Georgia
Ministry of Finance of Georgia
Ministry of Energy of Georgia
Statistical Office
National statistical office of Georgia
Central Bank
National Bank of Georgia
Stock Exchange
Georgia Stock Exchange
Search Engines
Georgia.net
Geres
Internet.ge
Economic Portals
Daily News of Georgia online
Economic Portal - Georgia Online
Georgian Ressources Portal
Eurasianet

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Political Outline

Executive Power
The head of the state is the President who is elected by a popular vote for a five-year term. The President is the commander-in-chief of the armed forces and holds the executive powers. The President is also the head of the Ministries of Energy and State Security; while the Prime Minister is the head of the remaining ministries. The President appoints the Cabinet of Ministers. The Georgian state is highly centralized, except for the two autonomous regions of Abkhazia and Ajara which have special autonomous powers since Soviet rule.

 

Legislative Power
The legislature in Georgia is unicameral. It consists of the Supreme Council (commonly referred to as Parliament), with its 235 members elected by popular vote to serve four-year terms. The government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. The President cannot directly dissolve the parliament or veto its enactments without taking parliament into his confidence. The citizens of Georgia enjoy limited political rights.
Main Political Parties
Georgia has a multi-party system. The major political parties in Georgia are:
- UNM (National Movement Democratic Front) – center-right liberal party, favors radical reforms and close ties with NATO and the European Union; 
- NRP (New Rights Party) – a liberal conservative political party;
- Industry Will Save Georgia – a right-wing political party, draws support from private industrial workers;
- Georgia's Way – advocates liberalism and democratic values, pro-EU.
Current Political Leaders
President: Mikheil SAAKASHVILI (re-elected on 5 January 2008) - UNM
Prime Minister: Nikoloz GILAURI (since February 2009).
Next Election Dates
Presidential: January 2013
Parliamentary: in 2012
 

Indicator of Freedom of the Press

World Rank:
105/179
Evolution:
5 places down compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

 

Indicator of Political Freedom

Ranking:
Partly Free
Political Freedom:
4/7
Civil Liberties:
4/7

Map of freedom 2010
Source: Freedom House

 

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