Georgia's economy sustained GDP growth of close to 10% in 2006 and 12% in 2007, based on strong inflows of foreign investment and robust government spending. However, growth slowed to less than 3% in 2008 and is expected to slow further in 2009. 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, aircraft and chemicals. Areas of recent improvement include growth in the construction, banking services, and mining sectors, but reduced availability of external investment and the slowing regional economy are emerging risks. The country imports nearly all its needed supplies of natural gas and oil products. It has sizeable hydropower capacity, a growing component of its energy supplies. Georgia has overcome the chronic energy shortages of the past by renovating hydropower plants and by bringing in newly available supplies from Azerbaijan. It also has an increased ability to pay for more expensive gas imports from Russia. The construction on the Baku-T'bilisi-Ceyhan oil pipeline, the Baku-T'bilisi-Erzerum gas pipeline, and the Kars-Akhalkalaki Railroad are part of a strategy to capitalize on Georgia's strategic location between Europe and Asia and develop its role as a transit point for gas, oil and other goods. Georgia has historically suffered from a chronic failure to collect tax revenues; however, the government has made great progress and has reformed the tax code, improved tax administration, increased tax enforcement, and cracked down on corruption since coming to power in 2004. Government revenues have increased nearly four fold since 2003. Due to improvements in customs and tax enforcement, smuggling is a declining problem. The country is pinning its hopes for long-term growth on a determined effort to reduce regulation, taxes, and corruption in order to attract foreign investment, but the economy faces a more difficult investment climate both domestically and internationally.
GDP (purchasing power parity):
$21.56 billion (2008 est.) country comparison to the world: 119 $21.12 billion (2007 est.)
$18.81 billion (2006 est.)
note: data are in 2008 US dollars
GDP (official exchange rate):
$12.86 billion (2008 est.)
GDP - real growth rate:
2.1% (2008 est.) country comparison to the world: 156 12.3% (2007 est.)
9.4% (2006 est.)