[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-108556-en":3,"doc-seo-108556-105":31,"detail-sidebar-cat-0-en-105":93},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":21,"is_downloadable":21,"audit_status":21,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":28,"seo_description":14,"update_tm":29,"read_time":30},108556,8796095461564,"Liam","https://ap-avatar.wpscdn.com/davatar_155a257f0dc6eb9ab79c44ca47cae57d",8,"Research & Report","Georgia Country Economic Memorandum - Chapter 1 - Understanding Georgia’s Growth","Georgia has set an objective to build a European state and formally applied for EU membership in March 2022, with public support for the European identity and EU accession. However, the economy’s performance remains not yet European: trade, firm capabilities, productivity, and employment quality lag behind. The chapter reviews growth through investment-savings, structural transformation, and growth accounting lenses, highlighting progress and constraints, including weak job creation, skills shortages, and uneven gains. It also examines digitalization and related risks alongside elements of the green agenda.","Public Disclosure Authorized Public Disclosure Authorized  \nGeorgia Country Economic Memorandum  \nChapter 1: Understanding Georgia’s Growth   \nUnderstanding Georgia’s Growth  \nKey Messages  \n1. Georgia has set itself an objective to build a European state.1 Its political leaders proclaimed this more than one hundred years ago,2 while their more current peers formalized it through a comprehensive association project with the European Union (EU) . In March 2022, the country officially applied for EU membership. Almost two thirds of the population believes that to be Georgian means to be European and almost 80 percent supports EU accession.  \n2. However, its economy still isn’t European. Europe’s economic successes have come from: i) integration through trade and finance; ii) innovative and socially and environmentally responsible enterprises, and iii) responsible governments and productive workers accorded strong protection (Gill & Raiser, 2012) . And while many of Georgia’s institutions provide a robust base on which to build (low corruption, good investment climate, responsible economic management) and a reasonable degree of integration is taking place in some respects, trade integration remains limited, firms’ capabilities are rather low, and labor is unproductive and, to a significant degree, informal. In fact, if it were to join the EU today, Georgia would bethe poorest economy in the bloc, with income levels half of that of the poorest EU-member and less than 15 percent of the EU average. It is also poorer than the official EU candidate countries.3  \n3. When the previous Country Economic Memorandum (CEM) for Georgia was produced in 2013, Georgia was reforming and growing rapidly, but had limited success in creating jobs, and imbalances were growing. GDP growth had averaged 6 percent since the Rose Revolution, as the private sector responded to the rapid and far-reaching reforms that kept total factor productivity (TFP) and gross capital formation high. However, progress in unemployment and poverty reduction was more modest, and strong domestic demand pushed down national savings, while firm-level productivity was stagnant. The CEM recommended more savings, reforms to boost productivity and improve export performance, as well as sector-specific reforms (apparel, wine production) to unlock the potential of the economy.  \n4. Since then, and until the COVID-19 pandemic, Georgia’s economy performed remarkably, addressing many constraints even as others persisted, and new ones emerged. GDP growth rates were robust, investment moderated but remained relatively high, savings improved (pre-COVID-19), and TFP, after going through a slump in the early years, had recovered. On the other hand, firm productivity did not improve, the skills shortage became an even more acute problem for businesses, and the integration of the country in regional and global value chains was underwhelming. Consequently, while the Georgian economy generated strong growth rates, it continued to perform less well in net creation of well-paying jobs with unemployment being the biggest concern for Georgians (Caucasus Barometer, Georgia 2020) . A global pandemic, more polarized domestic politics and geo-political activity on the rise, compounded by looming global trends (climate change, digitization, etc. ), also affected Georgia’s economic trajectory.  \n1 Government of Georgia: Program for 2021-2024; Towards building a European State. February 2021.  \n2 Noe Jordania, Prime Minister of Democratic Republic of Georgia, 1920 (Lejava, 2021) .  \n3 EU candidate countries includes Albania, N. Macedonia, Montenegro, Serbia and Turkey.  \n5. This chapter assesses Georgia’s growth performance through a few lenses, with a view to identifying drivers of growth, opportunities to build on Georgia’s many accomplishments, as well as challenges that may constrain growth. The investment-savings analysis aims to identify concerns from the macroeconomic side; the structural transform","cbCaibNBMJ4aeMQb","https://ap.wps.com/l/cbCaibNBMJ4aeMQb","pdf",1387089,5,1,45,"English","en",105,"# Key Messages\n## Georgia’s European State Objective and EU Accession\n## Economic Performance vs. Europe\n## Comparison with the 2013 Country Economic Memorandum\n## Growth Assessment Framework\n## Spotlight on Digitalization and Green Agenda","[{\"question\":\"How does the chapter reconcile Georgia’s European state objective with its current economic performance?\",\"answer\":\"It notes strong political and public alignment with Europe and EU membership, while arguing that the economy is still not matching Europe’s integration-driven successes, productivity, and employment outcomes.\"},{\"question\":\"What explains Georgia’s growth drivers and its limitations in job creation?\",\"answer\":\"Growth is underpinned by capital accumulation and efficiency gains, largely linked to shifts away from agriculture, but weak firm productivity, low labor productivity in key areas, and persistent informality constrain net creation of well-paying jobs.\"},{\"question\":\"Which analytical lenses does the chapter use to assess growth performance?\",\"answer\":\"It uses an investment-savings analysis, a structural transformation deep-dive, and a growth accounting framework to quantify contributions from factor inputs, efficiency, and productivity.\"}]","Georgia Country Economic Memorandum - 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