Tuesday, 31 July 2012

Economic downturn in Georgia

The crisis in Europe that has seen the economies of Greece, Spain, Ireland and Italy all come under significant pressure has sent shock waves across the rest of the continent.

Georgia is a small but influential country in the Caucasus region, south of Russia and bordering Turkey, Armenia and Azerbaijan. With a GDP of around $25Bn (on purchasing parity), the country has undertaken a major economic restructure to provide the opportunity of developing in a free, democratic state that welcomes entrepreneurs to create new businesses.
According to the International Monetary Fund (IMF) forecast, the economic outlook is now more difficult with GDP expected to fall from 6% to 5.5% next year and with inflation already at 7% above the IMF's forecast of 1.7% this year, there is a risk that it will seriously affect the quality of life for ordinary Georgians.
With a GDP per capita income of $5,600, Georgia ranks just 145 in the world's nations for average income. Much remains to be done to improve the quality of life for the average Georgian. With a heavily restricted press and a Government arresting and interrogating opposition activists, it makes life hard for business people to innovate and develop new ideas in such an oppressive atmosphere.
Freedom Index 2012
The Heritage Foundation working with the Wall Street Journal provide an Economic Freedom Index each year and it is disappointing to see that Georgia has fallen back in 2012 to 34th in the world with a "moderately free" classification. For a aspiring democracy with a free market that is concerning.
I am particularly concerned for young Georgians and with unemployment at 15% there are too many people without work struggling in poverty. 

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