Georgia Economy 2007

Economy - overview:
Georgia's main economic activities include the cultivation of agricultural products such as grapes, citrus fruits, and hazelnuts; mining of manganese and copper; and output of a small industrial sector producing alcoholic and nonalcoholic beverages, metals, machinery, and chemicals. The country imports the bulk of its energy needs, including natural gas and oil products. It has sizeable but underdeveloped hydropower capacity. Despite the severe damage the economy has suffered due to civil strife, Georgia, with the help of the IMF and World Bank, has made substantial economic gains since 2000, achieving positive GDP growth and curtailing inflation. Georgia had suffered from a chronic failure to collect tax revenues; however, the new government is making progress and has reformed the tax code, improved tax administration, increased tax enforcement, and cracked down on corruption. Due to concerted reform efforts, collection rates have improved considerably to roughly 60%, both in T'bilisi and throughout the regions. In addition, the reinvigorated privatization process has met with success, supplementing government expenditures on infrastructure, defense, and poverty reduction. Despite customs and financial (tax) enforcement improvements, smuggling remains a drain on the economy. Georgia also suffers from energy shortages due to aging and badly maintained infrastructure, as well as poor management. Continued reform in the management of state-owned power entities is essential to successful privatization and onward sustainability in this sector. The country is pinning its hopes for long-term growth on its role as a transit state for pipelines and trade. The construction on the Baku-T'bilisi-Ceyhan oil pipeline and the Baku-T'bilisi-Erzerum gas pipeline have brought much-needed investment and job opportunities. Nevertheless, high energy prices have compounded the pressure on the country's inefficient energy sector. Restructuring the sector and finding energy supply alternatives to Russia remain major challenges.

GDP (purchasing power parity):
$18.16 billion (2006 est.)

GDP (official exchange rate):
$5.301 billion (2006 est.)

GDP - real growth rate:
9.4% (2006 est.)

GDP - per capita (PPP):
$3,900 (2006 est.)

GDP - composition by sector:
agriculture: 15%
industry: 28.3%
services: 56.7% (2006 est.)

Labor force:
2.04 million (2004 est.)

Labor force - by occupation:
agriculture: 40%
industry: 20%
services: 40% (1999 est.)

Unemployment rate:
12.6% (2004 est.)

Population below poverty line:
54.5% (2003)

Household income or consumption by percentage share:
lowest 10%: 2%
highest 10%: 30.3% (2003)

Distribution of family income - Gini index:
40.4 (2003)

Inflation rate (consumer prices):
9.2% (2006 est.)

Investment (gross fixed):
28.1% of GDP (2006 est.)

Budget:
revenues: $2.331 billion
expenditures: $2.507 billion (2006 est.)

Agriculture - products:
citrus, grapes, tea, hazelnuts, vegetables; livestock

Industries:
steel, aircraft, machine tools, electrical appliances, mining (manganese and copper), chemicals, wood products, wine

Industrial production growth rate:
3% (2000)

Electricity - production:
7.142 billion kWh (2005)

Electricity - consumption:
7.354 billion kWh (2005)

Electricity - exports:
122 million kWh (2005)

Electricity - imports:
1.468 billion kWh (2005)

Oil - production:
1,981 bbl/day (2004)

Oil - consumption:
13,000 bbl/day (2004 est.)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

Oil - proved reserves:
35 million bbl (1 January 2006)

Natural gas - production:
14.39 million cu m (2005 est.)

Natural gas - consumption:
1.415 billion cu m (2005 est.)

Natural gas - exports:
NA cu m

Natural gas - imports:
1.4 billion cu m (2005)

Current account balance:
$-1.243 billion (2006 est.)

Exports:
$1.667 billion (2006 est.)

Exports - commodities:
scrap metal, machinery, chemicals; fuel reexports; citrus fruits, tea, wine

Exports - partners:
Turkey 12.7%, Azerbaijan 9.4%, Russia 7.7%, Armenia 7.5%, Turkmenistan 7.3%, Bulgaria 6.4%, US 6%, Ukraine 5.8%, Canada 5%, Germany 4.6% (2006)

Imports:
$3.686 billion (2006 est.)

Imports - commodities:
fuels, machinery and parts, transport equipment, grain and other foods, pharmaceuticals

Imports - partners:
Russia 15.2%, Turkey 14.2%, Germany 9.5%, Ukraine 8.7%, Azerbaijan 8.7% (2006)

Economic aid - recipient:
ODA, $309.8 million (2005 est.)

Reserves of foreign exchange and gold:
$930.8 million (2006 est.)

Debt - external:
$2.04 billion (2004)

Market value of publicly traded shares:
$354.6 million (2005)

Currency (code):
lari (GEL)

Exchange rates:
lari per US dollar - 1.78 (2006), 1.8127 (2005), 1.9167 (2004), 2.1457 (2003), 2.1957 (2002)