EBRD: SPEED OF RECOVERY OF GEORGIAN ECONOMY IN 2021 WILL DEPEND ON DEVELOPMENTS IN HOSPITALITY SECTOR AND FOREIGN VISITORS’ INFLOW, BOTH OF WHICH ARE HIGHLY UNCERTAIN AT PRESENT
In its Transition Report for 2020-2021, released on November 10, EBRD forecasts reduction of Georgia’s GDP by 5% in 2020 with subsequent growth by 3.5% in 2021 (similarly to September forecast).
At that, the report indicates that “The speed of recovery and overall economic health in 2021 will be dictated by the developments in the hospitality sector and the inflow of foreign visitors, both of which are highly uncertain at present”.
ISET: INTRODUCTION OF INFLATION TARGETING WAS CORRECT DECISION
“By adopting its inflation targeting framework, it seems that NBG [National Bank of Georgia] has adopted the right approach”, International School of Economics at Tbilisi State University (ISET) said, pointing that since 2010 (NBG turned to the targeting in 2009), annual inflation has been 3.7% on average (a target indicator – 3%).
However, “NBG is not always able to take swift corrective actions in a way that would fully cushion the economy from external shocks in the very short term”, ISET noted, adding that NBG has been yet “successful in eventually bringing inflation back under control when a shock triggered a deviation”.
DEPUTY MINISTER OF ENVIRONMENTAL PROTECTION AND AGRICULTURE: GEORGIA STARTED DEVELOPMENT OF STRATEGY ON CIRCULAR ECONOMY
Solomon Pavliashvili, Georgia’s Deputy Minister of Environmental Protection and Agriculture, declared that the country started development of strategy on circular economy.
“The circular economy gives us an opportunity to respond the biggest challenges – overconsumption of natural resources, climate change and loss of biodiversity”, Pavliashvili pointed.
BUDGETARY OFFICE: SHARE OF “LABOR COMPENSATION” ARTICLE IN STATE BUDGET-2021 IS THE LOWEST IN COMPARISON WITH 2012-2019, BUT STILL EXCEEDS PLAN FOR 2020 BY 1.5 PP
Budgetary Office of Georgian Parliament indicated that according to the draft state budget of the country for 2021, volume of allocations planned under the “Labor Compensation” article makes up 13.9% of total expenditure that is the lowest indicator in comparison with data for 2012-2019. However, in comparison with planned target for 2020, the share still is increased by 1.5 percentage points (pp), the Office specified.
“PRODUCE IN GEORGIA” STATE PROGRAM AND CREDIT-AND-GUARANTEE SCHEME ARE AMENDED
Georgian Ministry of Economy and Sustainable Development declared that Georgian government decided to extend term of co-financing mechanism within “Produce in Georgia” state program for small, medium and family hotels. Subsidizing of credits, issued with mixed purpose, will be also allowed, the Ministry noted.
GEORGIAN BUSINESS ASSOCIATION DEMANDS EXTENSION OF TAX BENEFITS FOR BUSINESS
Georgian Business Association considers necessary to extend for a certain period those business-supporting privileges, which were introduced by Georgian government for mitigation of results of COVID-19 pandemic.
Today, business operators feel with even bigger sharpness those problems, which they faced in first months of the pandemic, and with high probability, business will find difficulty during the next months in jobs maintenance, the Association said in the released statement.
AS OF SEPTEMBER 30, TOTAL VOLUME OF BAD BORROWERS’ PROPERTY, WHICH PASSED TO BANKS’ OWNERSHIP, INCREASED BY 8.7% Q-O-Q AND BY 23.9% Y-O-Y
As of September 30, total volume of movable and immovable property of bad borrowers, which passed to banks’ ownership, amounted according to banks’ reports to 239.6 million lari. The volume has increased by 8.7% quarter-on-quarter and by 23.9% year-on-year.
ACCUMULATED LOSS OF “ENGURHES” MAKES UP 31.4M LARI
Audited report of state-owned LLC EngurHES for 2019 indicates this largest Georgian hydroelectric station had losses for years, so its accumulated loss makes up 31.4 million lari (as of the reporting year). The volume has increased by 35.2% year-on-year
The report indicates that the company supplies free of charge electric power to territory of Russia-occupied Abkhazia, which consumption grows from year to year, because of what the company faces threat that income from selling of the rest of electric power will not be sufficient for cover of operating expenses.
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