Economic Outlook and Indicators

Issue #24www.pmcg-i.com

29.04.2014M

In 2013, the volume of exports (315%; 144 mln. USD) and imports (24%; 116mln. USD) to Russia in-creased compared to the same indicators in 2012. The overall trade turnover expanded (50%; 260 mln. USD). Due to the significant increase of export, the share of export in total trade also increased (15 percent-age points) to 24%, while the share of import de-creased to 76% . In 2013, the negative trade balance with Russia re-duced (28mln. USD) and equals 399 mln. USD, due to increase of the share of exports (15 percentage points.)

Trade with Russia - 2013

In 2013 total volume of exports from Georgia to Russia is 190 mln. USD (24% of turnover), while import volume is 589 mln. USD (76% of turnover). In 2013 the negative trade balance with Russia decreased (7%; 28 mln.USD) and equals -399 mln. USD compared to 2012. In 2013 Georgia exported to Russia wine (30% of the total exports to Russia), mineral water (18%), ferro-alloys (7%), electricity (6%) and citruses (4%). Georgia imported from Russia wheat (24% of the total imports from Russia), petrole-um (19%), gas (9%), electricity (6%) and chocolate (3%). In 2013 structure of exports has changed compared to 2012 . This is due to the removal of embargo on imports of agricultural products. In 2013 Russia is Georgia’s fourth largest export and import partner country. Share of exports to Russia in the total exports of Georgia to the World is 7% and the share of the imports is 7%.

In 2013, the top five imported commodities from Russia are wheat (24%), energy sources, such as gas (9%), electricity (5%) and petroleum (19%), and also chocolate (3%). In 2013 share of imports of wheat ( 1 percentage point), petroleum ( 5 percentage point), gas (3 percentage point), electricity (2 percentage point) increased and share of chocolate decreased (1 percentage point) compared to 2012. In 2013, the top five exported commodities include wine (30%), mineral waters (18%), ferro-alloys (7%), electricity (6%) and citruses (4%). It’s notable that wine has the highest share in total export to Russia. In 2013 structure of exports changed dramatically compared to 2012 . This is due to the removal of Russian embargo on imports of agricultural products.

Wine30%

Mineral waters18%

Ferro-alloys7%

Electricity5%

Citrus4%

Other36%

Share of Major Commodity Positions by Export to Russia, 2013

Wheat24%

Petroleum19%

Gas9%

Electricity5%

Chocolate3%

Other40%

Share of Major Commodity Positions by Import from Russia, 2013

42% 44%33% 35% 29% 29%

12% 7% 7% 7% 11% 9% 9%

24%

58% 56% 67% 65% 71% 71% 88% 93% 93% 93% 89% 91% 91% 76%

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

exte

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Share of Export and Import in External Trade Turnover with Russia

export import ext.trade. balance (right axis)

Motor cars33%

Electical energy

20%

Others27%

2012

Wheat 23%

Petroleum14%

Gases12%

Others40%

2012

Contact Information

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Source: National Statistics Office of Georgia, Ministry of Finance of Georgia, National Bank of Georgia

*projected

PMCG Research Tamar Jugheli

E-mail: research@pmcg.geE-mail: t.jugheli@pmcg.geT: (+995) 2 921171www.pmcg-i.com

Economic Outlook and Indicators

Issue # 24www.pmcg-i.com

Trade with Russia - 2013 29.04.2014

Azerbaijan24%

Armenia11%

Ukraine7%Russia

7%Turkey

6%

Rest of the World45%

Share of the Top Trading Partners in Total Exports, 2013

Turkey17%

Azerbaijan8%

Ukraine8%

Russia7%

China7%

Other53%

Share of the Top Trading Partners in Total Imports, 2013

Russia is among the top five export partners as well as among the top five import partners of Georgia. In 2013, top five export destinations for Georgia are Azerbaijan (24%), Armenia (11%), Ukraine (7%), Russia (7%), Turkey (6%). Top five import destinations are Turkey (17%), Azerbaijan (8%), Ukraine (8%), Russia (7%) and China (7%). In 2013 compared to 2012 the share of Russia in the total exports expanded ( 5 percentage points) to 7% and the share of Russia in the total imports expanded (1 percentage point) to 7%.

In 2013 volume of export of mineral waters reached 34mln. USD and export of wine increased to 56mln. USD. Export of ferro-alloys increased by 8mln. USD compared to 2012 and reached 13mln. USD. In the period of 2000-2005, the annual growth rate of wine, mineral water and ferro alloys are 25%, 30% and 48% respectively. In 2006 exports of wine (-74% ; -46 mln.USD) and water (-54%; -13 mln.USD) decreased sharply com-pared to 2005. In teh same period export of ferro-al-loys increased (26%; 5 mln.USD). In 2007 export of wine and mineral water drop to zero due to Russian embargo on imports of agricultur-al products from Georgia imposed in spring of 2006. In August 2012 embargo was lifted and the export of mineral water and wine restarted.

Basic Economic Indicators III12 IV12 2012 I 13* II 13* III 13* IV 13* 2013*

Nominal GDP in current prices (mln USD) 4129 4332.2 15 846.8 3487.6 3958.4 4120.3 4552.9 16126.4

Per capita GDP (USD) 918 963.2 3 523.4 777.8 882.8 918.9 1015.4 3596.6

GDP real growth, percent 7.50% 3,0% 6.2% 2.4% 1.5% 1.4% 7.1% 3.2%

Consumer Price Index (annual average) 99.1 99.5

Foreign Direct Investment (USD) 199 233.7 911.6 226.2 232.4 238.7 217.1 914.4

Unemployment Rate - 15%

External Public Debt (mln USD) - 4739 4202

Poverty Level (registered) - 9.7%

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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Dynamics of Export to Russia for three major commodities, 2000-2013

mineral water wine ferro-alloys