Georgia Rising : Sustaining Rapid Economic Growth

Economic growth in Georgia was strong at 6.1 percent per year during 2004-12 as structural reforms and a favorable global economy led to large foreign direct investment (FDI) inflows and expansion in the services sectors. However, the current account deficit has remained large and economic expansion has been driven primarily by the nontradable sectors, thus raising concerns about the sustainability of growth. This country economic memorandum (CEM) report shows that sustaining strong growth in Georgia going forward will require new policies that help support both high investment financed increasingly from domestic sources as well as sustained rapid productivity growth in the export and tradable sectors. The report presents an array of policy options to raise national saving, boost firm productivity, better deploy labor resources, and enhance export competitiveness. Raising national saving will require a shift in the fiscal framework to control growth of current expenditures and bolstering private saving through macro-prudential regulations and a package of measures to support saving for retirement. Stimulating firm productivity will require addressing a range of constraints, including streamlining the complexity of closing a business, reducing high borrowing costs, and improving the electricity pricing mechanism. Boosting job creation and more productively deploying labor resources will require upgrading overall education quality, strengthening vocational education systems, and developing job matching services to alleviate skills mismatches and reduce search costs. Enhancing competitiveness of exports will require addressing any overvaluation of the exchange rate, pursuing trade-related reforms to enhance access to European Union and international markets, and upgrading logistics and internal infrastructure.

Bibliographic Details

Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2013-07
Subjects:	ABSOLUTE POVERTY, ACCOUNTING FRAMEWORK, AGGREGATE DEMAND, AGGREGATE INCOME, AGRICULTURE, ANNUAL GROWTH, AVAILABILITY OF CREDIT, AVERAGE LEVEL, BANK ENTRY, BANK LOANS, BANK SPREADS, BANKING SECTOR, BENCHMARK, BORROWING COSTS, BUSINESS DEVELOPMENT, BUSINESS ENVIRONMENT, CAPITA INCOMES, CAPITAL ACCUMULATION, CAPITAL FLOWS, CAPITAL FORMATION, CAPITAL INFLOWS, CAPITAL MARKETS, CAPITAL MARKETS DEVELOPMENT, CAPITAL STOCK, COLLECTIVE INVESTMENT, COMMERCIAL BANK, COMMERCIAL BANK LOANS, COMMODITY, COMPARATOR COUNTRIES, COMPETITIVENESS, CONSUMER DURABLE, CONSUMPTION GROWTH, CONSUMPTION LEVELS, CORPORATE PROFITS, CORPORATE SAVING, CORPORATE SAVINGS, COUNTRY VARIATION, CREDIT AVAILABILITY, CREDIT CARD, CREDIT CARD DEBT, CREDIT CARDS, CURRENCY, CURRENT ACCOUNT BALANCE, CURRENT ACCOUNT DEFICIT, DATA AVAILABILITY, DEBT, DEBTS, DEMOGRAPHIC, DEPOSIT, DEPOSIT RATES, DESCRIPTIVE STATISTICS, DIVIDEND, DIVIDENDS, DOMESTIC CREDIT, DOMESTIC CREDIT GROWTH, DOMESTIC FINANCIAL MARKETS, DOMESTIC MARKET, DOMESTIC SAVINGS, DURABLES, ECONOMIC AGENTS, ECONOMIC CRISIS, ECONOMIC DOWNTURN, ECONOMIC GROWTH, EMERGING ECONOMIES, EMERGING MARKETS, ENTERPRISE PERFORMANCE, EQUIPMENT, EXCHANGE RATE, EXPENDITURE, EXPENDITURES, EXPORT GROWTH, EXPORT MARKETS, EXPORT SECTORS, EXPORT SHARE, EXPORTS, EXTERNAL DEBT, EXTERNAL FINANCING, EXTERNAL IMBALANCES, EXTREME POVERTY, FACTORS OF PRODUCTION, FINANCIAL CONSTRAINTS, FINANCIAL CRISIS, FINANCIAL INSTRUMENTS, FINANCIAL MARKETS, FINANCIAL SECTOR, FINANCIAL SERVICES, FINANCIAL STABILITY, FIRM GROWTH, FISCAL CONSOLIDATION, FISCAL DEFICIT, FISCAL POLICIES, FOREIGN CURRENCY, FOREIGN DIRECT INVESTMENT, FREE TRADE, FREE TRADE AGREEMENT, FUTURE GROWTH, GDP, GDP PER CAPITA, GINI COEFFICIENT, GLOBAL ECONOMY, GROSS DOMESTIC PRODUCT, GROSS NATIONAL SAVINGS, GROWTH ACCOUNTING, GROWTH IMPACT, GROWTH INVESTMENT, GROWTH MODEL, GROWTH PATH, GROWTH PROSPECTS, GROWTH RATE, GROWTH RATES, HOLDING, HOUSEHOLD INCOME, HOUSEHOLD SAVING, HOUSEHOLD SAVING RATE, HOUSEHOLD SAVING RATES, HOUSEHOLD SAVINGS, HOUSEHOLD SURVEYS, HUMAN CAPITAL, INCOME, INCOME GROWTH, INCOME LEVEL, INCOME LEVELS, INCOMES, INDUSTRIAL COUNTRIES, INFLATIONARY EXPECTATIONS, INSTRUMENT, INTERNATIONAL DEVELOPMENT, INTERNATIONAL MARKETS, INTERNATIONAL STANDARDS, INTERNATIONAL TRADE, INVESTMENT INSTRUMENTS, INVESTMENT RATE, INVESTMENT RATES, JOB CREATION, LABOR FORCE, LABOR FORCE GROWTH, LABOR MARKET, LABOR SUPPLY, LIQUIDITY, LIVING STANDARDS, LOAN, LOCAL CURRENCY, LONG RUN, LONG TERM SAVING, LONG TERM SAVINGS, MACROECONOMIC STABILITY, MARKET ACCESS, MARKET DEVELOPMENTS, MARKET EFFICIENCY, MARKET REFORMS, MARKET SHARES, MARKET STABILITY, MEDIUM TERM, MIDDLE INCOME COUNTRIES, MONETARY FUND, MORTGAGE LOANS, MORTGAGES, NATIONAL ACCOUNTS, NATIONAL BANK, NATIONAL SAVING, NATURAL RESOURCES, NET EXPORTS, NON-PERFORMING LOANS, NPL, OPEN ECONOMY, OUTPUT, OUTPUT RATIO, OUTPUTS, OVERVALUATION, PENSION, PENSION FUNDS, PENSION REFORM, POLICY AREAS, POLICY MAKERS, POVERTY LINE, POVERTY REDUCTION, PRIVATE DEBT, PRIVATE SAVING, PRIVATE SAVINGS, PRIVATIZATION, PRO-POOR, PRODUCTION FUNCTION, PRODUCTIVITY GROWTH, PUBLIC DEBT, PUBLIC FINANCES, PUBLIC INVESTMENTS, PUBLIC SAVING, PUBLIC SAVINGS, PUBLIC-PRIVATE PARTNERSHIPS, RAPID ECONOMIC GROWTH, RAPID GROWTH, RATE OF INVESTMENT, REAL ESTATE, REAL EXCHANGE RATE, REAL GDP, REDUCED FORM EQUATION, REDUCED POVERTY, REDUCING POVERTY, REGIME CHANGE, RESERVES, RESIDENTIAL MORTGAGE, RETIREMENT SAVING, RETIREMENT SAVINGS, RETURNS, RICH COUNTRIES, RURAL AREAS, SAVINGS, SECTOR REFORMS, SECTORAL COMPOSITION, SOCIAL PROTECTION, SUSTAINABLE GROWTH, TARIFF BARRIERS, TAX, TAX RATES, TAX REVENUES, TFP, TOTAL CONSUMPTION, TOTAL FACTOR PRODUCTIVITY, TOTAL FACTOR PRODUCTIVITY GROWTH, TRADABLE SECTORS, TRANSITION ECONOMIES, UNEMPLOYMENT, UNEMPLOYMENT RATE, VALUE ADDED,
Online Access:	http://documents.worldbank.org/curated/en/2013/07/18042630/georgia-rising-sustaining-rapid-economic-growth https://hdl.handle.net/10986/15984
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