FITA helps you find
service providers for:

Market Research


flag Georgia Georgia: Economic and Political Outline

In this page: 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 privatization reforms which were introduced by the government in 2012 have contributed in 2013 to an environment favorable to economic development and is making Georgia one of the most advanced countries in terms of the current transition in the region in 2014. The government actively seeks to attract international investors offering appealing tax and legal advantages. The energy and banking sectors are now completely privatized.

Georgia has a promising tertiary economy, but it is strongly dependent on its political sphere. With a growth of 2.5% in 2013 (6% in 2012) and the real good management of its public finances (the budget deficit has been lowered from 6.6% of the GDP in 2010 to 3.5% in 2013) the country has confirmed some good results (growth is estimated to be around 4.2% in 2014). But the financial situation is still fragile -with in particular a large current account deficit- and its level of growth still very much depends on external factors, in particular the level of growth in Europe.

The main challenge remains the reduction of poverty, which still affects, in 2014, about a third of the population.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 14.4415.8516.1316.1317.46
GDP (Constant Prices, Annual % Change) 7.26.23.2e5.0e5.0
GDP per Capita (USD) 3,2303,5233e3,607e3,918
General Government Balance (in % of GDP) -3.7-3.8-1.4e-2.8-2.3
General Government Gross Debt (in % of GDP) 33.832.332.233.9e33.6
Inflation Rate (%) 8.5-0.9-0.54.64.9
Unemployment Rate (% of the Labor Force) 15.115.014.6--
Current Account (billions USD) -1.84-1.85-0.95-1.35e-1.38
Current Account (in % of GDP) -12.8-11.7-5.9e-8.4-7.9

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture has contributed to 8.5% to the GDP in 2013but 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 21.6% to the GDP.

The most dynamic sector is the services sector (particularly hotels, restaurants, transport and telecommunications), which contributes to 70% 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 36.2
Value Added (in % of GDP) 9.4 24.0 66.6
Value Added (Annual % Change) 11.3 2.3 2.6

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Georgian Lari (GEL) - Average Annual Exchange Rate For 1 USD 1.671.781.691.651.66

Source: World Bank - Last Available Data.

 
 

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

Indicator of Economic Freedom

Definition:

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.

Score:
72.6/100
Position:
Mostly Free
World Rank:
22/178
Regional Rank:
12/43

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

Return to top

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.

Its three main export partners are Azerbaijan, Turkey and Armenia. 20% of exports went to the EU in 2013. Georgia exports mainly iron and steel, wine, aircrafts, fruits, tea and hazelnuts.

The main import commodities are mineral fuels, oil, vehicles, electronic equipment and pharmaceutical products. In 2013 its main suppliers have been 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 20092010201120122013
Imports of Goods (million USD) 4,3665,2577,0587,8427,874
Exports of Goods (million USD) 1,1341,6782,1892,3772,909
Imports of Services (million USD) 9109961,2011,3621,471
Exports of Services (million USD) 1,2251,5141,9162,4452,950
Imports of Goods and Services (in % of GDP) 48.952.854.857.857.6
Exports of Goods and Services (in % of GDP) 29.735.036.238.244.7
Trade Balance (million USD) -2,417-2,628-3,500-4,226-3,506
Trade Balance (Including Service) (million USD) -2,065-2,080-2,746-3,112-2,084
Foreign Trade (in % of GDP) 78.787.791.095.9102.3

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

 

Main Partner Countries

Main Customers
(% of Exports)
2014
Azerbaijan 19.0%
Armenia 10.1%
Russia 9.6%
Turkey 8.4%
United States 7.3%
See More Countries 45.7%
Main Suppliers
(% of Imports)
2014
Turkey 20.1%
China 8.5%
Azerbaijan 7.4%
Russia 6.7%
Ukraine 6.4%
See More Countries 50.9%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2014
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) 18.1%
Ferro-alloysFerro-alloys 10.0%
Copper ores and concentratesCopper ores and concentrates 8.7%
Other nuts, fresh or dried, whether or not shelled...Other nuts, fresh or dried, whether or not shelled or peeled (excl. coconuts, brazil nuts and cashew nuts) 6.4%
Wine of fresh grapes, incl. fortified wines; grape...Wine of fresh grapes, incl. fortified wines; grape must, partly fermented and of an actual alcoholic strength of > 0,5% vol or grape must with added alcohol of an actual alcoholic strength of > 0,5% vol 6.3%
See More Products 50.5%
- bn USD of products imported in 2014
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 10.7%
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) 8.3%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 4.3%
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%
Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras 2.0%
See More Products 71.0%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2012
55.52%
33.37%
3.81%
2.66%
1.93%
0.78%
0.72%
0.63%
0.30%
0.15%
0.13%
- bn USD of services imported in 2012
55.71%
17.77%
9.48%
6.01%
5.46%
1.48%
1.46%
0.87%
0.81%
0.53%
0.42%

Source: Comtrade, Last Available Data

Return to top

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
Google.ge
Geres
Internet.ge
Economic Portals
Daily News of Georgia online
Economic Portal - Georgia Online
Georgian Resources Portal
Eurasianet

Return to top

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: Giorgi MARGVELASHVILI (since 17 November 2013) - Georgian Dream
Prime Minister: Irakli GARIBASHVILI (since 20 November 2013) - Georgian Dream
Next Election Dates
Presidential: October 2018
Parliamentary: in 2016
 

Indicator of Freedom of the Press

Definition:

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 are 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.).

World Rank:
84/180
Evolution:
16 places up compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

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.

Ranking:
Partly Free
Political Freedom:
3/7

Map of freedom 2014
Source: Freedom House

 

Return to top

Any Comments About This Content? Report It to Us.

 

© Export Entreprises SA, All Rights Reserved.
Last Updates: October 2014