Georgia's economy earns its living from what crosses it

Why Georgia exports the cars it imports

What crosses the border as goods

Geostat's preliminary figures for January to August 2026 put Georgia's merchandise trade, excluding undeclared trade, at about 17.9 billion US dollars, 8.4% more than in the same months of 2025. Exports rose 22.1% to 5.423 billion dollars and imports 3.4% to 12.504 billion, which left a deficit of 7.082 billion, or 39.5% of turnover.

Motor cars account for about a quarter of the exports and nearly a fifth of the imports. Cars worth 1.347 billion dollars left Georgia in those eight months and cars worth 2.364 billion arrived. Petroleum and petroleum oils did the same thing on a smaller scale, 688.9 million dollars going out against 1.165 billion coming in. In Georgia's case the overlap is the trade itself: vehicles and fuel bought from one set of partners and sold to another. The Wikipedia entry on the Georgian economy lists the re-export of vehicles among the country's sources of income, and records how exposed it is. During the slowdown of 2014 and 2015, re-exports of cars to Azerbaijan fell 5.1 times against the previous year.

Trade of this kind follows demand somewhere else, and the swings show it. Georgia sent 7,360 cars worth 129 million dollars to Iran in January to August 2026, against ten cars worth about 280,000 dollars in the same months of 2025. Exports to Togo, almost all of them petroleum, reached 137 million dollars from a share close to zero. Exports to Kyrgyzstan came to 577.6 million dollars over the same eight months, to China 543.7 million, up 177.3%, and to Russia 500.6 million. On the import side Turkey supplied 1.918 billion dollars of goods, Russia 1.531 billion and the United States 1.510 billion.

The older export base is still there underneath. In 2015 the principal exports were copper ores and concentrates, ferroalloys, hazelnuts, medicines, nitrogen fertilisers, wine, crude oil, mineral water and spirits, and imports equalled 50% of gross domestic product that year against exports of 21%.

Which pipelines and railways cross Georgia

The same logic applies to fixed infrastructure. An oil pipeline runs from Baku through Tbilisi to Ceyhan on the Turkish coast, with the South Caucasus gas pipeline laid beside it, and the railway from Baku through Tbilisi to Kars opened on 30 October 2017 to connect the Caucasus with Turkey on standard gauge. Batumi and Poti handle freight on the Black Sea, and Azerbaijan uses Batumi as a transit point for energy deliveries to Europe. Russian gas bound for Armenia also passes through the Georgian pipeline system, and Georgia takes 10% of it as a transit fee.

A deep-water port at Anaklia has been in planning since at least 2015. Georgian media reported an agreement with Chinese companies on 11 March 2015 for a site of more than 1,000 hectares, and on 1 August 2017 the Anaklia Development Consortium signed with SSA Marine of the United States to invest in and operate its container terminal.

How Batumi became a terminal for Caspian oil

Until the middle of the nineteenth century most Georgian land was worked by serfs for noble landowners, the tavadis, and the countryside stayed overwhelmingly rural after serfdom began to be abolished in 1864. The change came at the coast. The Rothschild and Nobel families put money into the railway from Baku to Batumi and into a kerosene pipeline that brought Caspian oil to the Black Sea for European markets, and Batumi became a shipping point for fuel produced in another country.

Inland, the manganese at Chiatura did the same thing for ore. By 1913 Chiatura was supplying 50% of the world market for manganese, and Britannica still describes the deposits as comparable in quantity and quality with those of India, Brazil and Ghana.

Soviet rule after 1921 reorganised the land in 1929 and 1930 into collective and state farms, although a considerable share of output kept coming from private garden plots. The economy that resulted grew citrus, above all tangerines, along with tea and grapes, mined manganese and copper, and ran an industrial sector making wine, metals, machinery, chemicals and textiles, with Black Sea tourism alongside.

Independence broke nearly all of it. By 1994 Georgian output had shrunk to a quarter of its 1989 level, and that year brought shortages of bread, water, electricity and heat. Britannica attributes the contraction to political instability, the loss of trading relationships inside the former Soviet Union and the conflicts in Abkhazia and South Ossetia, where pipelines and transport links were sabotaged or blockaded. International grants and loans amounted to 116.4 million lari in 1997 and 182.8 million in 1998. The government of the late 1990s liberalised prices and most trade and introduced the lari, and more than 10,500 small enterprises had been privatised by the end of the decade. In 2001, 54% of the population lived below the national poverty line. Georgia: history follows the wars that cut those links.

What the reforms after the Rose Revolution removed

Most of what Georgia reformed after 2004 was taken away. The number of taxes was cut from 21 to six: personal income tax at 20%, profit tax at 15%, value added tax at 18%, excise, property tax of up to 1% of self-assessed value, and customs duty at 0, 5 or 12%. A flat income tax arrived in 2004. Social security contributions paid by employers on wages were cut from 31% to 20% in 2005 and abolished in January 2008.

Regulation went the same way. The number of licences and permits fell by 90%, and a "silence is consent" rule made a licence count as issued if the authority failed to refuse it in time. Import tariffs were abolished on about 90% of products, and three tariff rates replaced sixteen. A new Labour Code adopted on 17 December 2010 eased limits on fixed-term contracts and overtime, dropped the overtime premium and ended the requirement to seek a union's permission before dismissing a redundant worker, with at least one month's severance pay. A single Tax Code merged the tax and customs codes in January 2011. Kakha Bendukidze, who lived from 1956 to 2014, coordinated much of the programme.

The courts were part of it. In 2005 the judicial disciplinary council reviewed cases against 99 judges, about 40% of the judiciary, and dismissed 12, while judges' salaries were raised fourfold to reduce their dependence on bribes. The Global Property Guide nonetheless scored the Georgian court system at 40 out of 100 and described it as highly inefficient and influenced by other branches of government, so the reform record is read two ways by the sources that assess it.

Growth followed. Real output rose by more than 10% a year from 2004 to 2007, reaching 12.3% in 2007, and the economy grew 35% over the four years. Foreign direct investment came to 2,015.0 million dollars in 2007, up 69.3% on the year before, and totalled 8,511.5 million from 2003 to 2011. The war of August 2008 and the financial crisis that year then cut growth to 2.3% in 2008, and output contracted 3.8% in 2009 before growing 6.3% in 2010 and 7.0% in 2011. The share of the population below the national poverty line fell from 54% in 2001 to 34% in 2006 and 10.1% in 2015. Georgia: politics covers the governments that ran the programme.

What Georgian output is made of now

Geostat's preliminary estimate puts gross domestic product at 104.6 billion lari in 2025, or 38.1 billion US dollars, with real growth of 7.5% and nominal growth of 12.4%. In 2015 the nominal figure had been 13.98 billion dollars. Geostat gives output per head in 2025 as 28,235.4 lari, or 10,296.5 dollars, while the World Bank's series gives 9,692 dollars for the same year and 29,414 dollars at purchasing power parity. The two publishers print different figures for one year, and both are recorded here with their source. Geostat's revised data for 2025 is due on 13 November 2026.

The composition matches the trade figures. Trade and vehicle repair outweigh manufacturing, and transport and storage come close to agriculture. Services had already reached 59.4% of output in 2016. Information and communication supplied 28.7% of the growth recorded in 2025, education 24.5% and finance and insurance 12.9%, while agriculture, forestry and fishing shrank 5.7% and energy supply 4.5%.

Growth continued into 2026, at 9.0% in the first quarter and 6.9% in the second. The World Bank records inflation of 3.9% in 2025, and Civil Georgia reported annual inflation of 5.6% in August 2026. For 2026 as a whole the United Nations projected growth of 5.4%, and the European Bank for Reconstruction and Development and the Asian Development Bank both forecast 5%. The Gini coefficient stood at 33.9 in 2024.

How Georgia counts the people who farm its land

Agriculture produced about 7% of GDP in 2011, 6.1% in 2016 and 5.9% in 2025, and the people who depend on it are counted in a way that shapes the headline labour figures. The statistics office classes the head of a farming household as an individual entrepreneur and the relatives who help work the land as unpaid family business workers. In 2007, 416,900 people were listed as self-employed in agriculture. The method produces low unemployment in the countryside and higher unemployment in the towns and in Tbilisi, because a household working its own plot counts as employed.

Unemployment by the national measure stood at 16.9% in 2013 and 13.9% in 2024; the World Bank's series gives 12.1% for 2025. A 2019 survey of 1,500 residents found 73% considered unemployment a significant problem and 49% reported a fall in income over the previous year. Rural residents made up 48.2% of the population in 2011 and 46.3% in 2014, and the urban share had reached 61.2% by 2025.

Britannica describes Georgian farmland as short in supply and hard to work, with every workable patch valued even on steep slopes, and notes that wheat has to be imported because domestic grain is insufficient. Land privatisation began in 1992. The 2018 harvest gives the scale of what is grown:

Tea, hazelnuts and citrus lost ground after the conflict in Abkhazia, which had been a principal growing area for them. Georgia: geography explains why the wet west grows citrus and tea and the dry east grows grapes.

Where Georgian wine went after the Russian ban

Wine is an export tied to Georgia's own ground. The country's winemaking dates to 300 BCE by Britannica's account, and the two reference works count more than 450 local vine varieties and more than 500 grape varieties respectively. UNESCO inscribed the qvevri method on its Representative List in 2013: pressed juice, skins, stalks and pips go into an egg-shaped earthenware vessel that is sealed and buried in the ground for five to six months while the wine ferments.

Russia had been the traditional market for Georgian wine until 2006, when it banned imports of Georgian wine and mineral water. The ban followed statements by Georgian officials that the Russian market's quality requirements were low. Producers had to find other buyers. In 2011 Georgia sold 54 million dollars of wine in 48 countries and 68 million dollars of other alcoholic beverages in 32, and wine exports that year were 109% higher than in 2007. By 2012 Georgian wine was sold in 43 countries at more than 23 million bottles, with Ukraine taking 47.3% of wine exports, Kazakhstan 18.9% and Belarus 6.9%. Mineral water earned 48 million dollars in 35 countries in 2011, 2.1% of exports, and nuts 130 million dollars in 53 countries, about 6%.

The trade agreement with the European Union moved the rest of the ledger. Georgia has been part of the EU's free trade area since 2014, the EU accounts for more than a quarter of total trade turnover, and trade with the Commonwealth of Independent States fell 22% in 2015. A comprehensive economic agreement with the United Arab Emirates in 2023 established free trade with a second partner outside the region.

In September 2026 grape purchasing prices were adjusted after protests by growers in Kakheti, as officials expected an "unprecedented harvest".

Who sends money and visitors to Georgia

Where Georgians abroad send money from

Personal remittances equalled 11.2% of Georgian GDP in 2025, by the World Bank's figure. In 2019 transfers from abroad came to 1.73 billion dollars, according to the National Bank of Georgia. Russia sent 428.89 million dollars, Italy 239.17 million, Greece 192.56 million, the United States 178.41 million and Israel 162.55 million.

The pattern has since turned. Transfers reached 295.17 million dollars in August 2026, up 8.2% on August 2025, and the European Union and the United States together sent 214.07 million of it, or 72.5%. EU member states alone accounted for 149.93 million, 50.8% of the total. The United States sent 64.14 million, Italy 55.22 million, Germany 31.31 million, Greece 28.24 million and Israel 27.92 million. Transfers from Russia fell 87.7% on the year to 5.07 million dollars, 1.7% of inflows, down from 42.02 million in July and 51.42 million in June. In July 2026 the Russian transfer system Zolotaya Korona halted transfers to Georgia following EU sanctions.

How Georgia earns from its visitors

Georgia recorded 6,856,809 international visits in 2025, 6.2% more than in 2024, of which 5,521,866, or 80.5%, included at least one night's stay. Russia supplied 23% of them.

Receipts are measured by quarter. In the first quarter of 2025, international travellers brought 826 million dollars, 2.3% more than a year earlier and 42.8% more than in the first quarter of 2019. Russian visitors accounted for 142 million dollars of it, 17.2%, Israeli visitors 114 million, Turkish visitors 107 million and visitors from the European Union 103 million. The two income streams now run in opposite directions on Russia: visits from Russia rose 11.1% in 2025, while remittances from Russia fell 87.7% in the year to August 2026.

How Georgian rivers power Georgia and its neighbours

Hydropower generated 6.17 billion kilowatt-hours in 2005, 86% of Georgian electricity. In 2007 the country generated 8.34 billion kilowatt-hours and consumed 8.15 billion, and in 2010 it exported 1.3 billion. The Ministry of Energy estimates about 26,000 rivers in Georgian territory, some 300 of them significant for power, and has said that only 18% of the hydro potential is exploited. Britannica places three quarters of the capacity on the western rivers, the Rioni and its tributaries with the Inguri, Kodori and Bzyb.

Inguri is a political question as well as a technical one. The state-owned station, with 1,300 megawatts installed, stands on the administrative line with Abkhazia. In 2009 a proposal to manage it jointly with the Russian company Inter RAO for ten years caused a scandal, at a time when Inguri supplied 40 to 50% of the country's electricity.

Before 2004 the transmission network was in critical condition and blackouts were common across the country; legislative reforms in 1998 and 1999 unbundled the sector and created the Georgian National Energy Regulatory Commission, and supply moved towards round-the-clock service. The privately owned Energo-Pro Georgia controls 62.5% of electricity distribution. Gas consumption was 1.8 billion cubic metres in 2007, and supply shifted from Russia to Azerbaijan.

Reliance on water makes the balance seasonal, with imports in dry periods and exports in wet ones. Transmission lines connect the Georgian grid to Russia, Turkey, Armenia and Azerbaijan. By September 2025 electricity exports were flowing only to Azerbaijan, after Turkey reduced its imports, while imports came largely from Russia and Azerbaijan. In September 2026 Georgian officials said they hoped for a 2.5-fold growth in power generation by 2036.