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Friday, 23 March 2018


Crisis will not be over even if you keep saying “halvah”

2009-10-14 16:38

4261.jpegThe Georgian authorities cheered up the Georgian people prematurely: the economic crisis has been overcome. The US optimists and the sell-side analysts in Russia just as well announced the termination of recession. However, there is nothing to rejoice so far, for the real economy sectors are still in depression, while the date of settling the credits, by which means the state enterprises managed to come out of the crisis knock-out, is approaching.


"The crisis is over", - Prime Minister of Georgia Nika Gilauri told the journalists. What was the reason for such a victorious statement? The point is that at the end of the third quarter, the economy ceased to decline and started growing.

As GeorgiaTimes already reported, the GDP indicator in the second quarter exceeded 4,5 billion laris, which is 11 percent greater than in the first quarter. The third quarter started even more promisingly.

"The VAT payers' turnover in August - September is positive in comparison with the similar period last year. As to other indicators, such as the registration of apartments, their selling and purchasing, car market transactions, customs income - all of them are growing", - Gilauri said.

"The third quarter might be close to zero, or with a small plus, or there can even be plus one", - the prime minister supposed.

However, considering the drop in production in the first half-year, according to the government's forecasts, in 2009 the economy will basically reduce by one and a half or even four percent. Let us remind you that at the beginning of the year, a small growth of two percent was promised.

A month ago, the starting growth of industry was announced by another minister, Head of MFA Grigol Vashadze. "A year after the August war, our economy looks better than we had expected", - he is cited by the BusinessGeorgia portal. According to Vashadze, the country's economy entered a stable phase in September, there are no more failures in the banking system and the industry growth resumed.

"The current position is quite satisfactory considering the fact that we were fighting unemployment. Construction has been resumed, which is very important", - head of MFA stated, alluding to the anti-crisis measures package that enabled to boost the banking sector and the constructing business this summer.

Well, and what about the forecasts of the economists who all as one promised a new autumn wave of crisis in Georgia?

In summer, in his interview to the Medianews agency the expert of Center for Economic Policy Studies Ramaz Sakevarishvili forecasted that "with the beginning of autumn, the Georgian economy is going to face radically new challenges". He underlined that the difficulties might emerge in industry and finance, which share in production of the total domestic product is quite significant, as well as in other branches that do not raise much income but are socially loaded, like, for instance, the field of agriculture.

Less than a month ago, Executive Director of the Social and Economical Research Institute of the Caucasus, Doctor of Economics David Narmania warned against the groundless statements about the crisis fading away. In his opinion, Georgia has not yet been affected by the so-called "Asian crisis" which is going to influence the country in autumn. However, according to Narmania, even if the government is going to manage it, no use hoping for complete stabilization in the next 2-3 years, as well as for the stabilization of the entire world economy.

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