Georgian Economy on Track of Growing
12 September, 2013
Georgian Economy on Track of Growing
Georgian economy grew by 0.6% in July tentatively after the stagnation in May, the preliminary statistics say. It makes Finance Minister of Georgia Nodar Kahduri hopeful that Georgian economy bottomed out the stagnation and the period of irreversible economic growth started in the country. The preliminary data of economic growth of Georgia released by the official statistic body recently showed an increase in macro-economic parameters of Georgia that leads Khaduri to presume that overall economy in January-July of 2013 grew by
overall 1.7% and that the hard time of Georgian economy is in the past.
“The process of irreversible economic growth started in the country. Each month since March of this year is better than the previous one as both the research by Ministry of Finances (MOF) and independent experts indicate. These data prove that there are no problems in the state budget and government will fulfill all obligations it has assumed,” Khaduri said on September 9, 2013.
The investments inflow in the second quarter accounted for USD 232 million exceeding the similar figure for the same period of 2012 (USD 218 million) by 7% and slightly surpassed USD 226 million of the first quarter of this year. The tax collections in the state budget totaled GEL 3 785 million within 7 month of 2013 that outreached the data of the similar period of 2012 by GEL 31.3 million. The 8 months export of 2013 amounted to USD 1.140 billion exceeding the past year’s figure of the similar period by USD 69 million. By today the State coffers count GEL 755 million in reserves, GEL 61 million more than in the beginning of the year that goes to shows that the state really implemented the “tight belt’s” policy, Khaduri accentuated. His optimistic prognosis somewhat softens negative signals emerging in the society after the announcement of Georgian Prime Minister Bidzina Ivanishvili that he retires in few weeks after the presidential elections scheduled for the coming October. It is an open secret that the outcome of the 2012 parliamentary elections, which delivered the major power shift in the country, was made possible after the Georgian people showed its personal trust to Ivanishvili, the richest Georgian famous by his charitable activities. Ivanishvili believes that the slowdown in Georgian economy this year is an aftermath of problems in the economy community accumulated during the reign of the previous Authorities due to irrelevant management methods which put business under control of one person and enhanced state interference in private entrepreneurship. Ivanishvili assures his government upholds the best economic management model and that the state share will be reduced in the private sector. This will create guarantees things will go on the right track after his political retirement. Economic analysts agree that incumbent authority inherited very negative economic situation decorated by artificially inflated indicators of economic growth.
“Recent economic slowdown was the result of deflation that is rampant in Georgian economy for over two years already but thanks to foreign loans and the state-run infrastructure projects, GDP figure was growing, which did not mean creation of national wealth and created false feeling of economic growth; at the same time, the state-controlled statistic body provided inflated economic indicators and now, when the new authorities sticks to real figures, the comparison looks unfavorable,” economic analyst Lia Eliava said. “But the reality is that the new economic team did its best against the backdrop of diarchy, and besides, it is impossible to disentangle in overnight the extremely complicated problems of Georgian economy.”

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