“Since early 2000s visible positive developments have been observed in the economy of Georgia. In 2006 Georgia’s real GDP growth rate reached 8.8%, making Georgia one of the fastest growing economies in Eastern Europe.[1] The World Bank dubbed Georgia “the number one economic reformer in the world” because it has in one year improved from rank 112th to 18th in terms of ease of doing business.[45]However, the country has high unemployment rate of 12.6% and has fairly low median income compared to European countries.

IMF 2006 estimates place Georgia’s nominal GDP at US$7.76 billion. Georgia’s economy is becoming more devoted to services (now representing 54.8% of GDP), moving away from agricultural sector ( 17.7%).[1]

The country has sizable hydropower resources.

The 2006 ban on imports of Georgian wine to Russia, one of Georgia’s biggest trading partners, and break of financial links was described by the IMF Mission as an “external shock”,[46] In addition, Russia increased the price of gas for Georgia. This was followed by the spike in the Georgian lari’s rate of inflation.[citation needed] The National Bank of Georgia stated that the inflation was mainly triggered by external reasons, including Russia’s economic embargo.[47] The Georgian authorities expected that the current account deficit the embargo would cause in 2007 would be financed by “higher foreign exchange proceeds generated by the large inflow of foreign direct investment” and an increase in tourist revenues.[48] The country has also maintained a solid credit in international market securities.[49]

Georgia is becoming more integrated into the global trading network: its 2006 imports and exports account for 10% and 18% of GDP respectively.[1] Georgia’s main imports are natural gas, oil products, machinery and parts, and transport equipment.”