Georgian Economy Becomes Tardy
16 May, 2013
Georgian Economy Becomes Tardy
Economic slow-down in the first quarter of 2013 bespeaks that deflation process is aggravated and the Central Bank as well as Georgian administration are responsible for that.
The preliminary macroeconomic data of the first quarter of 2013 released by Geostat, Georgian statistics body, confirms the deflation and tardy economic activity that makes National Bank of Georgia (NBG) to presume that the targeted 6% of economic growth is unlikely this year. The inflow of Foreign Direct Investments (FDIs) dwindles, the foreign
trade shrunk and particularly affected the import that dropped by 8.5% compared to the similar period of 2012; prices went down as demand on credits and consumer goods is shy, thus inhibiting business activity. As a result, the inflation dropped to -1.7% in April and the NBG forecasts this data to dwindle furthermore in the coming four-six quarters. The figure is supposed to close the targeted 6% of inflation by end of the next year. To mitigate the process the NBG reduced monetary refinancing rate by 25 basis points to 4.25 percentage point on May 8, 2013. According to Giorgi Kadagidze, Governor of National Bank of Georgia, one of the key reasons to lower than expected economic growth is that business is still in the expectation regime. He expressed a hope the negative economic trend will improve in the second half of this year. Georgian economic analysts agree that business is still in the expectation regime due to the past parliamentary elections bringing shift of power in the country in October of 2012 that led to diarchy for the president of the country represents the opposition now and clashes incumbent authority quite openly. Situation is expected to be streamlined only after presidential elections scheduled in this coming October; however that never means that government and NBG must sit dwindling thumbs until then. Lia Eliava, a financial analyst, believes inadequate monetary and crediting policy of the NBG pushed the country in the deflation [that is more dangerous than inflation] in second half of 2011 and cannot handle the process since then.
“NBG names all reasons that led to economic slow-down except mentioning its own fault,” she said. “Central bank is responsible for stable prices in the country that it fails to maintain for a year and half already. There is a money famine in the country for the demand on consumer goods and credits is shrinking thus affecting the business activity and pushing prices down. The NBG instead of giving stimuli to money market is focused on pumping money from the economy all this period: it enhanced the requirement on capital reserves to commercial banks and increased sale of the state securities that deprived the economic off money.”
Soso Archvadze, an economic analyst, believes the ongoing deflation is not the NBG’s fault but is defined by aggravated recession of the global economy as well as by social-oriented policy of the authority. “Foreign trade makes 70% of Georgian GDP, so the global economic recession affects our economy and the NBG cannot help this. Yes, the business is in expectation regime but it is up to the government to make some incentives to revive the business activity. However authorities are more focused on implementation of social-oriented pre-election promises rather than to work out some taxation preferences. Eventually Georgian economy is sacrificed to the social policy,” he said.
Print
Other Stories
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
Mziuri Park in Tbilisi to be renovated soon
It was the dream of prominent Georgian writer Nodar Dumbadze that when the original Mziuri park was constructed and opened in 1892 that it should be a park for children,
Winemakers to produce Kvanchkara in its place of origin - Racha
Khvanchakara is a semi-sweet Georgian red wine which originates from Racha, in the western part of Georgia. Kvanchkara is made of two types of grape Mujuretuli and Aleksandrouli.
The level of Georgian wine and Chacha exported has increased
The National Wine Agency of Georgia has recently published statistical information about the level of Georgian wine and Chacha exported between January and July, 2018.
New fire engines to be Manufactured in Georgia
The Acting Head of the Emergency Management Agency Shalva Khutsishvili said that the old Zili fire engines (which were made in the USSR) will be phased out and replaced with new ones, manufactured in Georgia.
Georgia witnesses a record number of tourists
The Georgian National Tourism Administration publishes statistical information about international visits to Georgia.
Canadian businessman plans to build a hotel in Bakhmaro
Canadian businessman Vadim Malishev plans to build a hotel in Bakhmaro resort, Guria, in the western part of Georgia.
Coffee Factory will open in Tbilisi in October
The first coffee factory (which will be located on the Kakheti highway) in Tbilisi will open in October.
Places in Georgia where real estate is the most expensive
The real estate market in Georgia is growing annually. In Tbilisi as well as other regions of Georgia new developments are increasingly taking place.
How much does a vacation cost in Tbilisi?
It is the middle of summer and those who have not yet taken a vacation are looking for an appropriate place for sure!
The price for extreme sports in Georgia
Georgia offers a variety of options to extreme sport lovers.
The number of Georgians who own property abroad increases
The number of foreign properties owned by Georgians is increasing.
How much does Taxi cost in Tbilisi?
Stories how Taxi drivers try to deceive passengers and charge them with more money than they should pay are known for everybody all over the world.
What are the highest paid areas in Georgia
According to the data collected by the National Statistics Office of Georgia in the first quarter of 2018 the highest paid jobs in Georgia are found in the financial and insurance fields.
PHOTO OF THE DAY
Exchange Rates
GEL Exchange Rate
Convertor
21.09.2018
22.09.2018
USD
1
USD
2.6193
2.6216
EUR
1
EUR
3.0693
3.0854
GBP
1
GBP
3.4651
3.4584
RUB
100
RUB
3.9538
3.9340
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.6216
EUR
1
EUR
3.0854
GBP
1
GBP
3.4584
RUB
100
RUB
3.9340