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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, which had a negative impact on economic growth and continues to hinder foreign investment, despite the strong support of the international community. Georgia's growth and economic attractiveness, which relies largely on foreign investment, have been challenged by the conflict with Russia and later by the international economic crisis.

The (fiscal and privatisation) reforms which were introduced by the government have contributed to the creation of an environment favorable to economic development and make Georgia one of the most advanced countries in terms of the current transition in the region. The government actively seeks to attract international investors offering appealing tax and legal advantages. The energy and banking sectors are now completely privatised.

Georgia has a promising tertiary economy, but it is strongly dependent on its political sphere.  With a growth of 5.5% in 2011, the country has confirmed that it has come out of the recession of 2008-2009 (-4% in 2009). As a sign of a better control over the public finances, the budget deficit has been lowered from 6.6% of the GDP in 2010 to 3.7% in 2011.

The main challenge remains the reduction of poverty, which still affects about a third of the population.

 
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 10% 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 up to 24% to the GDP.

The most dynamic sector is the services sector (particularly hotels, restaurants, transport and telecommunications), which contributes more than 66% 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 20062007200820092010
Georgian Lari (GEL) - Average Annual Exchange Rate For 1 USD 1.781.671.491.671.78

Source: World Bank - Last Available Data.

 

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Learn more about Market Analyses about Georgia on Globaltrade.net, the Directory for International Trade Service Providers.
 

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

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

 

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.

Since the embargo imposed by Russia on certain food products, the two countries have ceased all trading with each other. The embargo has weakened the agricultural sector, which represents 10% of the GDP.

Turkey has replaced Russia as the country's largest trading partner. Its three main export partners are Turkey (20% of exports), Azerbaijan and Canada. 20% of exports go to the EU. Georgia exports mainly iron and steel, wine, aircrafts, fruits and hazelnuts.

The main import commodities are mineral fuels, oil, vehicles, nuclear reactors and boilers, electronic equipment and pharmaceutical products. Its main suppliers are Turkey, Ukraine and Azerbaijan. The EU countries contribute to more than 30% of the country's imports. Its trade balance is traditionally negative.

 
Foreign Trade Indicators 20072008200920102011
Imports of Goods (million USD) 5,2156,3024,3665,0977,058
Exports of Goods (million USD) 1,2321,4951,1341,5802,189
Imports of Services (million USD) 8721,1569109961,202
Exports of Services (million USD) 9761,1571,2251,5141,949
Imports of Goods and Services (in % of GDP) 58.058.448.953.0-
Exports of Goods and Services (in % of GDP) 31.228.629.533.8-
Trade Balance (million USD) -2,896-3,836-2,399-2,572-
Trade Balance (Including Service) (million USD) -2,735-3,815-2,059-2,038-
Foreign Trade (in % of GDP) 89.287.078.486.9-

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

 
 

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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

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

 

Indicator of Political Freedom

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

Map of freedom 2010
Source: Freedom House

Note: The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

 

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