Economic and Political Overview

flag Georgia Georgia: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Georgia is a transition economy influenced by its past affiliation to the Soviet Union. Economic growth in recent years was boosted by rising domestic and external demand, resulting in higher consumption, exports, tourism and remittances. After contracting following the COVID-19 pandemic, the country’s GDP rebounded strongly in 2021 (+10.4%) and continued its positive trend in 2022, when growth - driven by higher export, tourism revenues, and a large inflow of money transfers - was estimated at 9% by the IMF. Strong private consumption was also boosted by the surge in migrants from Ukraine. According to the IMF projections, GDP growth will moderate to 4% in 2023, due to fading support from Russian inflows and weaker external demand, returning to just above the trend rate of 5% in 2024.

General government debt, which had already shown an upward trend in recent years as a result of public infrastructure spending, expanded further in the last couple of years, as the government stepped up social and capital spending as part of a Covid-19 response package. In 2022, the government managed to reduce the deficit to 2.7% of GDP thanks to an increase in revenue prompted by enhanced taxation. For 2023 and 2024, Fitch Ratings sees a deficit below the 3% fiscal rule ceiling, at 2.6% and 2.8%, respectively. After increasing by more than half following the outbreak of the Covid-19 crisis, the debt-to-GDP ratio returned to a downward trend and stood at 39.8% in 2022, of which 75% is foreign-currency denominated, and should remain relatively stable over the forecast horizon (IMF). As in most countries, inflation stood well above the National Bank of Georgia's target of 3%, averaging 11.6% in 2022, pushed by rising energy prices and higher demand due to the immigration influx. The IMF forecasts the inflation to moderate to 6% this year before halving in 2024, although risks remain tilted to the upside. Given Georgia’s small and open economy, the lari exchange rate remains very volatile, often eroding household purchasing power.

The Georgian unemployment rate is still high: it was estimated at 18.7% in 2022 and is expected to reach 20.2% by 2024, also due to the increased number of immigrants joining the labour market. According to the latest figures from GeoStat, 17.5% of the population was living below the poverty line in 2021: Inequalities remain high compared to other economies in the region, with low levels of education and a rural population (40% of the total – World Bank). Overall, the average GDP per capita (PPP) was estimated at USD 19,789 in 2022 by the IMF.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 24.6130.0231.4234.0836.85
GDP (Constant Prices, Annual % Change) 10.16.24.85.25.2
GDP per Capita (USD) 6,6718,1658,5739,33110,128
General Government Balance (in % of GDP) -0.30.10.60.90.8
General Government Gross Debt (in % of GDP) 39.839.639.338.738.1
Inflation Rate (%) n/a2.42.73.03.0
Unemployment Rate (% of the Labour Force) 17.318.418.618.117.5
Current Account (billions USD) -0.98-1.82-1.81-1.89-2.04
Current Account (in % of GDP) -4.0-6.1-5.8-5.6-5.5

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

More than 1.7 million Georgians, out of a population of 3.7 million, constitute the domestic labour force (World Bank) and the country possesses many natural resources on its territory. The country has forests and woods, rivers and lakes, farmland, marble, minerals, manganese, iron, copper, coal, oil, clays, and sand, as well as wildlife. Georgia has an agricultural tradition, which has helped develop its economy for years. However, the agricultural sector has been in decline since 1995: agriculture now accounts for 6.5% of the GDP and employs 38% of the working population (World Bank, latest data available). 98% of farmers are self-employed, and production is largely for self-consumption. More than 40% of Georgian territory is considered agricultural land, which also includes pastures and grasslands. The main agricultural products are cereals, technical plants, subtropical plants, fruit varieties, melons and gourds, tobacco and wine grapes, as well as rice, tea and cereals, tea and livestock. Georgia is also one of the oldest regions of wine producers and is rich in drinking water resources. The country has signed a Deep and Comprehensive Free Trade Area (CFTA) agreement with the EU, which implies that all Georgian agricultural products can be exported without duty to EU markets. According to the latest available figures by the National Statistics Office, the average annual income stands at GEL 1,508 for small holdings and GEL 13,151 for medium and large holdings.

Following a decline during the break-up of the Soviet bloc, and again between 2004 and 2008, the industrial sector in Georgia has seen signs of modest recovery. The industry contributes 21.4% of the GDP and employs 14% of the working population, while the manufacturing sector accounts for 9.3% of the GDP (World Bank). The industrial sector includes mainly food processing and the manufacture of transportation equipment, electric motors, iron, steel, aircraft, chemicals and textiles. Mineral extraction concerns manganese (mainly in the Chiatura and Imeritia regions), copper, tungsten, marble and oil. Although Georgia has significant hydroelectric power generation capacity, it is heavily reliant on oil and gas imports. In the first nine months of 2022 total industry turnover stood at GEL 13.6 billion, 35.3% more than in the same period one year earlier.

Services is the most dynamic subsector of the economy, accounting for 59.5% of Georgia's GDP and employing around 48% of the workforce (World Bank). The sector is boosted by the hotel, restaurant, transport and telecommunications industries. The tourism sector grew rapidly until Covid-19 (9.4 million visitors in 2019, 1.7 million in 2020 according to Georgian National Tourism Administration), and has become one of the government's priorities with the development of coastal infrastructures in the Adjara region and Svaneti ski resorts. Nevertheless, in 2022 the tourism sector showed signs of recovery, with 5.4 million foreign tourists (188.5% y-o-y). The National Administration of Tourism declared that Georgia received USD 3.5 billion from international tourist visits in 2022, 7.6% more than the pre-COVID level recorded in 2019.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 40.4 13.8 45.8
Value Added (in % of GDP) 6.1 21.5 59.9
Value Added (Annual % Change) 2.9 15.2 9.4

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Georgian Lari (GEL) - Average Annual Exchange Rate For 1 MUR 0.070.070.070.080.08

Source: World Bank - Latest available data.

 
 

Find out all the exchange rates daily on our service Currency Converter.

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, labour 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:
77,2/100
World Rank:
12
Regional Rank:
7

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Georgia is very open to international trade as it accounts for around 93.3% of its GDP (World Bank – latest data available). The country has no foreign exchange controls, allows foreign investment in almost all sectors, and has an impressive privatization program, particularly in terms of land allocation. The main products exported in 2022 were copper ores and concentrates (18.3%), motor cars (16.2%), ferroalloys (8.2%), mineral or chemical fertilizers, nitrogenous (2%), and wine of fresh grapes (4.5%); whereas the main imports were motor cars (12.5%), petroleum and petroleum oils  (9.9%), copper ores and concentrates (5.7%), petroleum gases and other gaseous hydrocarbons (3.4%), and medicaments (3% - data Statistics Georgia).

In 2022, Georgia's main customers were China (13.2% of total exports), Azerbaijan (12%), Russia (11.7%), Armenia (10.5%), and Turkey (7.8%). Its main suppliers were Turkey (17.6% of total imports), Russia (13.6%), China (8.3%), the U.S. (7.2%), and Germany (4.9%). Overall, the EU accounted for 15.4% of total exports and 22.6% of imports (data Statistics Georgia). Georgia was the second former member of the Soviet Union to join the WTO and free trade agreements with Europe and China help attract foreign investors. In 2014, Georgia signed an Association Agreement (AA) and a Comprehensive Free Trade Agreement (ALECA) with the European Union, which has strengthened its exports. The Georgian government is seeking to improve its ports on the Black Sea to boost East-West trade.

Georgia has a structural trade deficit due to the low diversity and value of exports. According to WTO, in 2021 merchandise exports amounted to USD 4.2 billion (+26.9% y-o-y), whereas imports reached USD 10.1 billion (+25.4% y-o-y). At the same time, exports of commercial services increased by almost 70% to USD 2.5 billion, while imports of services amounted to USD 1.8 billion (+30.1%). Preliminary figures from Statistics Georgia show that in 2022 the country’s exports reached almost USD 6 billion, 31.8% higher vis-à-vis 2021; whereas imports reached USD 13.5 billion (+33.8%).

 
Foreign Trade Indicators 20182019202020212022
Imports of Goods (million USD) 9,3629,5188,04910,09913,548
Exports of Goods (million USD) 3,3803,7983,3414,2435,583
Imports of Services (million USD) 2,2462,4251,4561,8222,972
Exports of Services (million USD) 4,4904,6001,5802,5475,654
Imports of Goods and Services (Annual % Change) 10.36.6-16.611.014.4
Exports of Goods and Services (Annual % Change) 10.19.8-37.624.438.2
Imports of Goods and Services (in % of GDP) 61.263.856.659.663.0
Exports of Goods and Services (in % of GDP) 50.654.837.343.252.9
Trade Balance (million USD) -4,116-3,792-3,165-3,790-5,100
Trade Balance (Including Service) (million USD) -1,872-1,616-3,041-3,065-2,426
Foreign Trade (in % of GDP) 111.8118.693.9102.8115.9

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2022
China 13.2%
Azerbaijan 12.0%
Russia 11.5%
Armenia 10.5%
Türkiye 7.8%
See More Countries 45.0%
Main Suppliers
(% of Imports)
2022
Türkiye 17.5%
Russia 13.5%
China 8.3%
United States 7.5%
Germany 4.9%
See More Countries 48.2%

Source: Comtrade, Latest Available Data

 
 

Main Products

5.6 bn USD of products exported in 2022
Copper ores and concentratesCopper ores and concentrates 18.3%
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) 16.2%
Ferro-alloysFerro-alloys 8.2%
Mineral or chemical nitrogenous fertilisers (excl....Mineral or chemical nitrogenous fertilisers (excl. those in pellet or similar forms, or in packages with a gross weight of <= 10 kg) 5.0%
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 4.5%
See More Products 47.6%
13.6 bn USD of products imported in 2022
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) 12.7%
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 9.9%
Copper ores and concentratesCopper ores and concentrates 5.7%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 3.4%
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) 3.0%
See More Products 65.4%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 
 

Main Services

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Ministry of Environmental Protection and Agriculture of Georgia
Ministry of Economy and Sustainable Development of Georgia
Ministry of Finance of Georgia
Ministry of Energy of Georgia
Statistical Office
National Statistics Office of Georgia
Central Bank
National Bank of Georgia
Stock Exchange
Georgian Stock Exchange
Search Engines
Google.ge
Internet.ge
Economic Portals
Daily News of Georgia online
Economic Portal - Georgia Online
Eurasianet

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Political Outline

Current Political Leaders
President: Salome ZOURABICHVILI (since 16 December 2018)
Prime Minister: Irakli GARIBASHVILI (since 22 February 2021)
Next Election Dates
Presidential: 2024
Parliamentary: October 2024
Main Political Parties
Georgia has a multi-party system. The major political parties are:
- Georgian Dream (coalition comprising of Democratic Georgia; Conservative Party; Industry Will Save Georgia; Republican Party of Georgia; National Forum): nationalist, pro-market, pro-west, diverse
- People's Power: populist
- United National Movement (UNM): centre-right, largest opposition force, favors radical reforms and close ties with NATO and the European Union
- Free Democrats: liberal, centre, pro-European

Other parties include:

- Alliance of Patriots
- European Georgia
- Lelo
- Strategy
- Girchi
- Citizens
- Georgian Labour Party

Type of State
Parliamentary democracy
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 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 had special autonomous powers since Soviet rule.
Legislative Power
The legislature in Georgia is unicameral: the Parliament has 150 members, of which 120 are directly elected in a single nationwide constituency by closed, party-list proportional representation vote, while 30 are directly elected in single-seat constituencies by at least 50% majority vote, with a runoff if needed. The members of the Parliament serve a four-year term. 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.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures 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 incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. 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:
60/180
 

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:
4/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Georgia, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: November 2023