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A prelude to Economic Freedom Act2009-10-06 21:47
Today, President of Georgia Mikhail Saakashvili is presenting the so-called Economic Freedom Act to the deputies. He describes the way he sees the country economy. The situation is far from being satisfactory. Recently, the government submitted to the parliament a budget statement for the next year. The state budget revenues are cut up by the claws of the crisis.
The Georgian statistical data seem to be comforting for the government. The second quarter of the year was marked by a slight growth of economy. The GDP index exceeded 4,5 billion laris (US $2,7 bln), which is by 11 percent greater than in the first quarter.
However, in the context of the last year figures the current stabilization seems to fade: the three-month GDP is 15 percent less than the figure in the same period of 2008.
Foodstuffs are growing in price in the country. At the same time, prices for apartments as for "the items of luxury" have slumped almost twice by 42 percent, as the Business Georgia portal reports.
Banks extend fewer loans. The amount of monthly deposits decreased by 75 million laris, equaling to over 5,3 bln laris by 1 September 2009.
The amount of unemployed is growing. Enterprises continue going bankrupt. The last victim of the crisis was the Georgian Ocean Company belonging to Eastwood, a ruined American company.
According to official data, about half a million families live below the poverty line. 200 thousand people are going on the dole; 900 thousand have got free medical insurance.
In the middle of summer, the Georgian government adopted a stimulus package, which helped to replenish the budget due to treasury liabilities and slightly boost the constructive and banking sector. The state also provided assistance to tourism and agriculture; however it did not settle the whole range of problems.
Today, Mikhail Saakashvili is going to submit to parliament his new ideas on pulling the economy out of the crisis. Basing on presidential initiatives, the government is going to develop the second package of draft laws in the field of economic policy.
It is already clear that the state will have to continue reducing expenses. The next year budget statement recently submitted to the delegates is composed with account of revenues reduction by 300 million laris down to 4,865 bln laris compared to the figures of 2009.