Georgia Gets Rid of Economic Crisis, says Prime Minister

“We faced a lot of difficulties in 2009, but the year has become a turning point anyway and we will have 2 percent economic growth in 2010”, Georgian Prime Minister Nikoloz Gilauri said at the December 30 news conference.

Foreign Direct Investments (FDI) will make up USD 800m as of January 1, 2010. Total of USD 505m was invested in Georgia in three quarters, including USD 230m in 3Q09. The Georgian Government expects that the same amount of FDI is invested in Georgia in 4Q09, Gilauri said.

Total of USD 1.2bln will be invested in Georgia in 2010 and the economic growth will be 2 percent, Gilauri noted.

The economic fall equaled 4 percent in 2009, but the economic dynamics is positive. The economic fall rate made up 5 percent in 1Q09, 10 percent in 2Q09 and 1.2 percent in 3Q09, the Prime Minister said.

The positive dynamics was achieved through a number of liberal legislative amendments and investment projects, he said.

The Economic Liberty Act is of crucial importance, as it guarantees potential investors that tax rates will not increase for tens of years, the Prime Minister said.

Amendments to the law on Pharmaceutical Business are also very important to ensure valuable competition on the market, Gilauri said.

The reformation of the Department of Statistics will be completed soon and the Department will continue operation as GeoStat, Gilauri noted.

The New Life of Old Tbilisi project is very important, because the project supports development companies and enables citizens to move to new apartments. Commercial banks will have minimum risks with issuing mortgage loans and the portfolio of ban loans will also decrease, Gilauri said.

Gilauri expressed his discontent with the privatization results because of low incomes. The Georgian Prime Minister and the Economic Development Minister will introduce a new plan in January 2010. Under the plan, the state budget will collect 250m GEL in 2010 from the privatization process, Gilauri noted.

Gilauri finds the Georgian bank sector activities satisfactory. He believes that loans and deposits will rise in 2010 too.

The Georgian agribusiness sector has also made success in 2009 through the exports diversification. For the first time, in 2009 citrus growers sold their crop without problems. Georgian citrus has penetrated the new markets of Turkmenistan, Belarus, Moldova and Czech Republic.

The 2010 state budget will spend significant funds on the education and healthcare sectors. The Health Ministry will introduce a new project, he noted.

Moreover, Georgia has increased electricity exports in 2009. The country also launched the construction of several hydro power plants, which will generate total of 126-130 megawatts. Georgian has inaugurated the construction of a 500-kilovolt transmission line too, he said.

Georgian has returned the confidence of foreign investors. The price of Eurobonds at London Stock Exchange (LSE) totals USD 120, while the figure equaled USD 62 in 1Q09.

Thus, Georgia has got rid of the economic crisis, the Georgian Prime Minister concluded.