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Georgia anticipating the second wave of crisis2009-05-18 20:49
The latest economic news seems to be rather distressing: a growing avalanche of overdue credits, suspended trading at the stock exchange and a foreign debt swelling because of the national currency fall. The National Bank of Georgia took a decision to set the lari to "free floating". The experts are anticipating another wave of crisis.
The overdue bank credits problem is being aggravated; the clients of commercial banks keep applying to Anti-Crisis Council for help, as the Business Georgia portal informs. According to Chairman of the Council Gia Tortladze, the officials have already solicited for a deferral and debt restructuring for 100 individuals. The situation is pushing the experts to more alarming forecasts. In the opinion of Vazhi Kapanadze, the growing overdue credits amount may lead to a collapse. He believes the government should take urgent measures to handle the situation. The same viewpoint was expressed by Zaza Sioridze, the founder of the Emigrant investment company. "The authorities should show goodwill to help the banks and the people, they should grant credits to
commercial banks so that they could overcome the problems and at the same time buy out the individuals' liabilities from banks", - he declared. As GeorgiaTimes has already mentioned, the people's insolvency has practically led to cessation of the construction sector development. The people no longer buy real estate property and are unable to make timely mortgage payments.
The tourist business is facing the same hardships with the credits extending. Founder of the Travel Tour tourist company Siko Gegiadze has complained about this problem in his interview to radio Commersant. He believes that the remedy to the economical situation lies in a more liberal tax code and the state's non-interference in business affairs. By the way, the government has taken a step in favor of businessmen by simplifying the taxation of customs warehouses. Besides, some business people think that the country is already enjoying quite comfortable situation for running the business. "In Georgia, you can incorporate a company within 24 hours; the tax system is rather satisfactory, the income tax has fallen down and is going to fall even more by 2013", - Head of the Georgian Department of the International Chamber of Commerce and Industry of the USA Fadi Asli recently stated at the conference of manufacturers. According to him, the economic crisis in the country has not yet taken the scope of other world countries, and it is no great problem to start a new business here even today.
Meanwhile, there is an active fall at the Georgian stock exchange. Within the last month, the major part of commercial transactions was concluded outside the stock exchange, Business Georgia reports.
In the first days of May, the lari rate also started to fall, and this tendency has been lasting for almost a year. Alongside with new credits extended by IMF and World Bank, this is going to lead to a significant grow of Georgia's foreign debt. As of the end of 2008, the debt amounted to 4,697 lari bln, while by now it has increased by 79,2 lari mln, according to the Chamber of Control. This figure is changing every day depending on the exchange rate. On the 4th of May, the trading at the stock exchange started from the rate of 1,6501 for 1 USA dollar; gradually lari fell down to 1,6550 and is keeping to that level.