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Kobalia stuck in an economic hole2010-10-14 16:08
Georgia's relations with trade partners are far from parity. In Turkey, the largest exporter to the country, Georgia is losing its export positions. In the first eight months of 2010 the export turnover has reached USD 150. 5 mln (15.4% of the total). Besides, inflation as well as deficit on the current account of the balance of payments are growing. The government has finally acknowledged that economy is not quite healthy issuing an updated forecast plan on average annual GDP growth rate for 2011-2014.
The message of this new document for Georgian people is this: hopes for GDP growth in comparatively near future won't come true. According to the "2011-2014 main indexes and directions" the annual average growth in real gross product for the next four years has been lowered by 0.4 points - from 6.3% to 5.9%. People are advised to abandon illusions in connection with the inflation: it will not go down. On the contrary it will rise by 1% to maintain 6-7%. Besides, a 8% rise in consumer prices (the previous outlook envisaged 6%) is expected too this year.
In addition to that, the country will face the current account deficit widening to 12.7% of the GDP by 2011. However, even here the Georgian authorities find a reason for joy: over the next three years this index is expected to go down to 12% in 2012, 10.4% in 2013 and 8.3% in 2014.
Last year was disappointing for Georgia, to put it mildly. The GDP growth slowed down by 3.9%. The annual inflation rose to 9.8% in the Caucasian republic as it is grievously reported by Georgia's Statistics Service and the National Bank. The latter makes attempts to fight the inflation increasing the monetary policy rate from 6.5 to 7% while all other "money" authorities are completely inert.
Indeed, what are the Finance Ministry and the Ministry of Economy and Sustainable Development of Georgia going to do to conquer the "economic evil"? Do they plan to raise the minimum wage rate?
Since if consumer prices keep growing and the average salary remains at the level of GEL 500, citizens will hardly be able to afford EUR 50-100 tickets to Europe Georgia's "economy matron" speaks about. People of the country won't be able to buy PCs on credit either, as Dmitry Shashkin suggests. It seems the only thing for poor Georgians to do will be to thumb "2011-2014 main indexes and directions" and sigh chewing churchkhela.