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Saakashvili is going to borrow money from the banks for social needs2009-06-03 18:00
Georgia desperately needs funds. Financial authorities have found a way out of the crisis. They decided to issue government obligations and, by selling them to banks, replenish the depleting budget; however, the experts rather doubt the efficiency of this step.
It looks like Georgia will soon be unable to pay out retiring pensions and allowances. Minister of Finance reported that the country has been vainly trying to implement the state budget revenues. According to the Income Department, tax revenue has significantly decreased owing to the crisis and political protest actions.
In April, the shortage amounted to 500 thousand laris. In May, the budget was short of 7 million laris.
Grigol Gobedzhishvili, head of the Income Department, stated to Commesant that one should not expect any revenue increase in June unless the political situation changes to the better.
Instead of a 1% GDP growth predicted earlier by the international experts, the Georgian experts are anticipating a 1,5% decrease of the economic upturn.
In the opinion of expert Vazha Beridze, the crisis has mostly affected the banking and financial sectors. He is warning against a great number of people that might be left without shelter due to the increasing amount of troubled loans. Beridze is also concerned about the country having reduced export and import; besides, the protest actions resulted in reducing the investment flow to Georgia. All of these factors have led to economic downturn.
Is there any way to resume the economic growth in case the government is not going to satisfy the opposition's demand as to the resignation of Mikhail Saakashvili and his henchmen? The officials have developed a special economic boosting package. One of the proposed innovations is the issue of treasury bills.
By selling state obligations to the banks, Saakashvili's government is going to get hard cash for financing social liabilities and infrastructure projects. Otherwise, the wave of the people's discontent is going to crash the regime, which has been compromised enough already.
The country is planning to attract 250 mln laris via realization of the treasury bills. This was stated on June, 1, by Prime Minister of Georgia Nika Gilauri, BusinessGeorgia informs. It is assumed to repay the borrowed money in 3-4 months.
The last time when Georgia resorted to government obligation auction sale was in spring 2005. Later this method was given up because of the high interest rate of the banks and speculating transactions.