World Bank2013-10-012013-10-012013-07https://hdl.handle.net/10986/15984Economic 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.en-USCC BY 3.0 IGOABSOLUTE POVERTYACCOUNTING FRAMEWORKAGGREGATE DEMANDAGGREGATE INCOMEAGRICULTUREANNUAL GROWTHAVAILABILITY OF CREDITAVERAGE LEVELBANK ENTRYBANK LOANSBANK SPREADSBANKING SECTORBENCHMARKBORROWING COSTSBUSINESS DEVELOPMENTBUSINESS ENVIRONMENTCAPITA INCOMESCAPITAL ACCUMULATIONCAPITAL FLOWSCAPITAL FORMATIONCAPITAL INFLOWSCAPITAL MARKETSCAPITAL MARKETS DEVELOPMENTCAPITAL STOCKCOLLECTIVE INVESTMENTCOMMERCIAL BANKCOMMERCIAL BANK LOANSCOMMODITYCOMPARATOR COUNTRIESCOMPETITIVENESSCONSUMER DURABLECONSUMPTION GROWTHCONSUMPTION LEVELSCORPORATE PROFITSCORPORATE SAVINGCORPORATE SAVINGSCOUNTRY VARIATIONCREDIT AVAILABILITYCREDIT CARDCREDIT CARD DEBTCREDIT CARDSCURRENCYCURRENT ACCOUNT BALANCECURRENT ACCOUNT DEFICITDATA AVAILABILITYDEBTDEBTSDEMOGRAPHICDEPOSITDEPOSIT RATESDESCRIPTIVE STATISTICSDIVIDENDDIVIDENDSDOMESTIC CREDITDOMESTIC CREDIT GROWTHDOMESTIC FINANCIAL MARKETSDOMESTIC MARKETDOMESTIC SAVINGSDURABLESECONOMIC AGENTSECONOMIC CRISISECONOMIC DOWNTURNECONOMIC GROWTHEMERGING ECONOMIESEMERGING MARKETSENTERPRISE PERFORMANCEEQUIPMENTEXCHANGE RATEEXPENDITUREEXPENDITURESEXPORT GROWTHEXPORT MARKETSEXPORT SECTORSEXPORT SHAREEXPORTSEXTERNAL DEBTEXTERNAL FINANCINGEXTERNAL IMBALANCESEXTREME POVERTYFACTORS OF PRODUCTIONFINANCIAL CONSTRAINTSFINANCIAL CRISISFINANCIAL INSTRUMENTSFINANCIAL MARKETSFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL STABILITYFIRM GROWTHFISCAL CONSOLIDATIONFISCAL DEFICITFISCAL POLICIESFOREIGN CURRENCYFOREIGN DIRECT INVESTMENTFREE TRADEFREE TRADE AGREEMENTFUTURE GROWTHGDPGDP PER CAPITAGINI COEFFICIENTGLOBAL ECONOMYGROSS DOMESTIC PRODUCTGROSS NATIONAL SAVINGSGROWTH ACCOUNTINGGROWTH IMPACTGROWTH INVESTMENTGROWTH MODELGROWTH PATHGROWTH PROSPECTSGROWTH RATEGROWTH RATESHOLDINGHOUSEHOLD INCOMEHOUSEHOLD SAVINGHOUSEHOLD SAVING RATEHOUSEHOLD SAVING RATESHOUSEHOLD SAVINGSHOUSEHOLD SURVEYSHUMAN CAPITALINCOMEINCOME GROWTHINCOME LEVELINCOME LEVELSINCOMESINDUSTRIAL COUNTRIESINFLATIONARY EXPECTATIONSINSTRUMENTINTERNATIONAL DEVELOPMENTINTERNATIONAL MARKETSINTERNATIONAL STANDARDSINTERNATIONAL TRADEINVESTMENT INSTRUMENTSINVESTMENT RATEINVESTMENT RATESJOB CREATIONLABOR FORCELABOR FORCE GROWTHLABOR MARKETLABOR SUPPLYLIQUIDITYLIVING STANDARDSLOANLOCAL CURRENCYLONG RUNLONG TERM SAVINGLONG TERM SAVINGSMACROECONOMIC STABILITYMARKET ACCESSMARKET DEVELOPMENTSMARKET EFFICIENCYMARKET REFORMSMARKET SHARESMARKET STABILITYMEDIUM TERMMIDDLE INCOME COUNTRIESMONETARY FUNDMORTGAGE LOANSMORTGAGESNATIONAL ACCOUNTSNATIONAL BANKNATIONAL SAVINGNATURAL RESOURCESNET EXPORTSNON-PERFORMING LOANSNPLOPEN ECONOMYOUTPUTOUTPUT RATIOOUTPUTSOVERVALUATIONPENSIONPENSION FUNDSPENSION REFORMPOLICY AREASPOLICY MAKERSPOVERTY LINEPOVERTY REDUCTIONPRIVATE DEBTPRIVATE SAVINGPRIVATE SAVINGSPRIVATIZATIONPRO-POORPRODUCTION FUNCTIONPRODUCTIVITY GROWTHPUBLIC DEBTPUBLIC FINANCESPUBLIC INVESTMENTSPUBLIC SAVINGPUBLIC SAVINGSPUBLIC-PRIVATE PARTNERSHIPSRAPID ECONOMIC GROWTHRAPID GROWTHRATE OF INVESTMENTREAL ESTATEREAL EXCHANGE RATEREAL GDPREDUCED FORM EQUATIONREDUCED POVERTYREDUCING POVERTYREGIME CHANGERESERVESRESIDENTIAL MORTGAGERETIREMENT SAVINGRETIREMENT SAVINGSRETURNSRICH COUNTRIESRURAL AREASSAVINGSSECTOR REFORMSSECTORAL COMPOSITIONSOCIAL PROTECTIONSUSTAINABLE GROWTHTARIFF BARRIERSTAXTAX RATESTAX REVENUESTFPTOTAL CONSUMPTIONTOTAL FACTOR PRODUCTIVITYTOTAL FACTOR PRODUCTIVITY GROWTHTRADABLE SECTORSTRANSITION ECONOMIESUNEMPLOYMENTUNEMPLOYMENT RATEVALUE ADDEDWorld Bank10.1596/15984