Georgia’s economy may contract

Bloomberg

"This will be an extremely difficult year for Georgia, and the economy will contract," Bendukidze said in a weekend interview in the capital Tbilisi. "The war with Russia has been compounded by the global crisis, and our economy is simply reacting."

The National Bank of Georgia estimates that Georgia’s economy will expand 2 percent this year. Gross domestic product probably grew 2 percent in 2008, according to the government.

Georgia’s $12.8 billion economy suffered about $1 billion in damage from the five-day war with Russia over the separatist region of South Ossetia. Georgia won pledges of $4.55 billion in international aid in the wake of the war, including a two-year $1 billion offer by the U.S.