Georgia Economic Impact and Responses June, 16, 2009 Kiev, Ukraine

1. E&E Competitiveness Conference Georgia Economic Impact and Responses June, 16, 2009 Kiev, Ukraine

2. Economic Growth GDP Nominal GDP (US$bn) Real GDP growth, y-o-y (%) Nominal 2008 GDP is US$12,797 mln Source: Department of Statistics of Georgia, Ministry of Finance of Georgia Source: Department of Statistics of Georgia Source: International Monetary Fund Georgian Economy Overview

3. Investment Inflows Net FDI Source: Department of Statistics of Georgia Source: National Bank of Georgia, International Monetary Fund Georgian Economy Overview May 2009 www.georgia.gov.ge

4. Banking Sector Expansion 2009 2008 1999 2000 2001 2002 2003 2004 2005 2006 2007 Dhabi Group www.georgia.gov.ge Georgian Economy Overview May 2009

5. Exchange Rate Exchange rate evolution Source: National Bank of Georgia Georgian Economy Overview May 2009

6. Monetary Performance NBG’s Gross FX Reserves Source: National Bank of Georgia Source: National Bank of Georgia Georgian Economy Overview

7. The Donors’ Pledges of US$4.5 billion Aid by donors Aid by sectors Source: World Bank, European Commission Source: World Bank, European Commission • As of 1 May 2009, Georgia has already entered into agreements for or received 38.2%(US$1,731.2 million, 13.4% of 2009 forecast GDP) of the total donors pledge to private and public sectors • Additional projects have already been indentified and agreements have been reached on the amount of US$1,879.4 million (41.4% of total pledge, 14.6% of 2009 forecast GDP) to be formally committed in 2009 • Government of Georgia has been working and negotiating the terms and conditions on the remaining amount of US$924.4 million, 20.4% of total pledged amount www.georgia.gov.ge Georgian Economy Overview May 2009

8. Current Account Deficit Current account deficit Note: Updated as of 10 April 2009 *Donor inflows include both public and private sectors. Donor inflows in 2009 is adjusted according to the banking sector foreign debt outflows Source: National Bank of Georgia , Minister of Finance of Georgia Exports and imports** CAGR (‘04-‘09F): 16% CAGR (‘04-‘09F): 10% **Export & import of goods and services Source: National Bank of Georgia www.georgia.gov.ge Georgian Economy Overview May 2009

9. Fiscal Revenue Tax revenue performance (GEL mln) Source: National Bank of Georgia Georgian Economy Overview May 2009

10. Recent Reforms - Taxation • Out of 21 taxes under the former tax code, only 6 exist today • Tax rates reduction timetable has been further accelerated in key tax rates in 2008 • This will provide a significant stimulus for the economy in 2009 and beyond • Georgia, over the last five years, has evolved into one of the most attractive low-tax jurisdictions in Europe Georgian Economy Overview

11. Banking Sector NPL to total loans Source: National Bank of Georgia, FSA Foreign debt outflow US$468.5 mln of US$548.5 mln banking sector debt, due in Q1 and Q2 0f ‘09, has already been repaid Source: National Bank of Georgia, FSA www.georgia.gov.ge Georgian Economy Overview May 2009

12. Georgia – USAID EG Activities Needs Short term assistance to most vulnerable Increased Competitiveness (gov & bus) Reducing/rationalizing perceptions of risk Activities Trade and Investment – Access to information Business Development – Competitiveness, Human Capital Continued Economic Reform Georgian Economy Overview