Macroeconomic Forecast Georgia

After the energy crises that made for a harsh start to 2006 for many in Georgia, the government is preparing to privatise three distribution companies and six hydroelectric power stations. The immediate impact of the venture should be some US$120mn in revenues for the state budget (a welcome start after FDI disappointed in 2005), but more importantly, it should spark a revamp of a rather dilapidated industry. As bilateral relations with Moscow deteriorate, working to boost domestic capacity in the energy sector becomes increasingly important for Georgia, though its dependence on gas from Russia will continue for many years

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