Georgia Economy (the Country of Georgia, Formerly in the Soviet Union/ CIS)

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The economy of Georgia has done good progress after 1995 with the help of the assistance received from the World Bank and IMF. In the year 2007 GDP went up to 12%. Agriculture is the main economic activity of the country.

 

Vital Statistics:

The economy of Georgia has done good progress after 1995 with the help of the assistance received from the World Bank and IMF. In the year 2007 GDP went up to 12%. Agriculture is the main economic activity of the country.

 

 

Vital Statistics:

GDP (purchasing power parity)- $185.9 Billion (2007) GDP real growth rate- 12.4% (2007 estimated.) GDP per capita (PPP) - $4,700 (2007 estimated) Unemployment rate- 13.6% (2006) Inflation rate (consumer prices) - 9.2% (2007 estimated) Main Agricultural products– citrus, grapes, tea, hazelnuts, vegetables; livestock Main Industries- steel, aircraft, machine tools, electrical appliances, mining (manganese and copper), chemicals, wood products,

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The economy of Georgia suffered a set back after the break up of the former Soviet Union. Trade and other economic activity of the country were disrupted as a result of this phenomenon. The GDP of the country declined drastically between 1990 and 1995. During this time the country depended heavily on foreign aid.

Agriculture, chemicals, metals, machinery, mining and production of liquor are the main industries of the Georgian economy. Agriculture is the main sector of the economy of the country, contributing nearly 21% towards her GDP. Other sectors making significant contribution towards the country’s GDP include hotels (17%), financial services (20%), communication (19%) and construction (33%).

After 1995, the country experienced significant economy development, with the help of the funs received from IMF and World Bank. Inflation rates dipped and GDP grew. The economy of the country also received a boost after the construction of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline. It has also led to an increase in employment opportunities in the country.

Since 2003, the revenues of the country increased almost four times. In the year 2006, the GDP of Georgia experienced a growth rate of 10%. This further went up to 12% in 2007. However, the economy appears to be in a risky situation due to high inflation rates and widening of the trade deficits. The country currently needs to work upon its mining, construction and banking sectors. Georgia imports a major part of its energy resources. It, however, has a good supply of hydropower. By revamping and improving its hydropower plants and by increasing the supply of its natural gas from Azerbaijan, it has managed to meet its energy resource deficiency. The country is currently taking major steps to attract more and more foreign investment for long term growth and development.

Economy of Georgia and the global financial crisis

As Georgia is heavily dependent on foreign investment, the economy of the country might get affected. Chances are there that the rate of foreign direct investment might slow down. The country needs to sustain and improve its own domestic resources to prevent any adverse effect on its economy.