Georgia Economy 2008

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's GDP growth neared 10% in 2006 and 2007 despite restrictions on commerce with Russia. Areas of recent improvement include increased foreign direct investment as well as growth in the construction, banking services, and mining sectors. In addition, the reinvigorated privatization process has met with success. However, a widening trade deficit and higher inflation are emerging risks to the economy. Georgia has 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. Despite improvements in customs and financial (tax) enforcement, 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. 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):
$19.65 billion (2007 est.)

GDP (official exchange rate):
$5.963 billion (2007 est.)

GDP - real growth rate:
10% (2007 est.)

GDP - per capita (PPP):
$4,200 (2007 est.)

GDP - composition by sector:
agriculture: 12.3%
industry: 29.7%
services: 58% (2007 est.)

Labor force:
2.04 million (2004 est.)

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

Unemployment rate:
13.8% (2005 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):
8% (2007 est.)

Investment (gross fixed):
31.6% of GDP (2007 est.)

Budget:
revenues: $2.805 billion
expenditures: $3.006 billion (2007 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:
12% (2007 est.)

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:
1,979 bbl/day (2005)

Oil - consumption:
13,400 bbl/day (2005 est.)

Oil - exports:
2,400 bbl/day (2004)

Oil - imports:
13,530 bbl/day (2004)

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

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

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

natural gas - exports:
0 cu m (2005)

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

natural gas - proved reserves:
8.147 billion cu m (1 January 2006 est.)

Current account balance:
-$1.582 billion (2007 est.)

Exports:
$1.908 billion (2007 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:
$4.725 billion (2007 est.)

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:
$1.592 billion (31 December 2007 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 - 1.7 (2007), 1.78 (2006), 1.8127 (2005), 1.9167 (2004), 2.1457 (2003)