Bank of Georgia Financial Overview

Georgia's key economic drivers Liberal economic policy Regional logistics and tourism hub Strong FDI Support from international community Cheap electricity Political environment stabilized Liberty Act, enshrined in the constitution and effective starting 2014 ensures a credible fiscal and monetary framework: -Government expenditure/GDP capped at 30% - Budget deficit/GDP capped at 3% - Government debt/GDP capped at 60% Proceeds from foreign tourism estimated at $937 mln in 2011, with 2.8 million visitors (42% increase y-o-y); number of foreign visitors grew by 39% in Q1 y-o-y Regional energy transit corridor with approx. 1.6% of world's oil production and diversified gas supply passing through the country Strong FDI inflows (US$981mln in 2011), diversified across different sectors Net remittances of US$1,168min in 2011, 23% increase over previous year FDI averaged 10% of GDP in 2003-2011 Free Trade Agreements (Official Discussion in progress with the EU; Discussions commenced with the USA) to drive inward investments and exports Strong political support from NATO, EU, US, UN and member of WTO since 2000 Substantial support from IFIs, the US and EU: US$2.5bn already disbursed out of the US$4.5bn Brussels pledge Diversified trade structure across countries and products Net electricity exporter since 2007, net electricity importer for more than a decade; 2011 electricity export reached 1.5 TWH Only 18% of hydro power capacity utilized; 40 hydro power stations are being built/developed Black Sea Transmission Network project envisages construction of new 500kV/400kV line connecting to Turkey. Project commenced in 2009 and is expected to become operational in 2013. BSTN to significantly boost export potential to Turkey, up by 750MW from current capacity Healthy operating environment for business and low tax regime Parliamentary elections in 2012, presidential elections are scheduled for 2013 New constitution passed in May 2010 to enhance governing responsibility of Parliament and reduce the powers of the Presidency Continued economic relationship with Russia - Russia began issuing visas to Georgians in March 2009; Georgia abolishes visa requirements for Russians - Direct flights between the two countries resumed in January 2010 - WTO negotiations successfully completed; Georgia, a member of WTO since 2000, allows Russia's access to WTO Sources: Geostat, IMF, National Bank of Georgia, Government of Georgia Presentation (Georgia.gov.ge) BANK OF GEORGIA www.bogh.co.uk www.bankofgeorgia.ge/ir May 2012 Page 33

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