Georgia

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.

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, wine.

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%).

Georgia Export, Import and Trade

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.

V. Challenges faced by the world economy

The simple meaning of an "Economy" is that a system which provides living to the peoples. In the congruous manner we mean the world economy, which provides lives to more than six billions of peoples in the world.

The GDP in the purchasing power parity according to 2005 estimation has reached $59.59 trillion with a real growth rate of 4.4%. The per capita GDP of the world has reached $9,300 according to 2005 estimation.

"World Population", A Liability or An Asset For World Economy?

The world economy constitutes a total estimated population of 6,525,170,264 as in July 2006 with a growth rate of 1.14%.

The world population more concentrated in the countries like China and India with more than one billion each was matter of more concern and was a liability to some extent for the world economy just before the adoption of opening policies. But in the present days both the nations being more service sector oriented have shown their respective potentialities of the peoples they hold and finally proved the same as assets.

The global output rose by 4.4% in 2005, which was led by China and India by 9.3% and 7.6%respectively. Both the front line players in the field of world economy have contributed a lot in the recent days.

More over in the economic point of view, the population of the world can be explained from different angles. With regards to the Social point of view the addition of 75 million peoples each year to an already overcrowded globe is exacerbating the problems of pollution, desertification, underemployment, epidemics, and famine.

Service Sector and World GDP

In the present days the composition of world GDP more relies upon the service sector. According to 2004 estimation level, agriculture constitutes 4%, Industry constitutes 32% and the services sector constitute 62% of the total GDP.

Even the services sector employs around 45% of the total labour force in the world.

In The World Scenario

The sector in the world is dominated by the technology, particularly computers, robotics, telecommunications, medicines and medical equipments. The advances have taken place in OECD nations. But a small portion of non-OECD countries has succeeded in rapidly adjusting to these technological forces. The accelerated development of new industrial (and agricultural) technology is complicating already grim environmental problems.The growth rate of the industrial production according to estimated 2003 data was at 3%.

Inflation the Global Threat

The rising crude prices have raised the fear of inflation at a faster extent to the world economy. Presently the developed countries experience a rate of 1% to 4%; developing countries 5% to 20% typically. The national inflation rates vary widely in individual cases, from declining prices in Japan to hyperinflation in third World countries like (Zimbabwe). More over the inflation rates have declined for most countries for the last several years, held in check by increasing international competition from several low wage countries (2005 est.).

The rising economic performance of the world economy is really one sided when we consider the present global challenges as follows:

Introduction of the euro as the common currency of much of Western European countries in January 1999 has posed economic risks because of varying levels of income, cultural and political differences among the participating nations of the world.

The terrorist attacks on the US on 11 September 2001 are a matter of concern to the global economy.

The opening of war in March 2003 between a US-led coalition and Iraq added new uncertainties to global economic prospects.