Georgian PM: ‘Recent developments brought dissonance to economy, but macroeconomic factors are quite healthy’
PM Bakhtadze said that Georgia will deal with the short-term and temporary fluctuations of the lari. Photo: PM's press office.
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Recent developments have brought dissonance to the Georgian economy, however the macroeconomic factors are quite healthy, said Georgian Prime Minister Mamuka Bakhtadze while commenting on the devaluation of the Georgian national currency, the lari, today.
Bakhtadze was referring to Russian President Vladimir Putin’s ban on flights to Georgia this summer. Bakhtadze said that Georgia will deal with the short-term and temporary fluctuations of the lari.
All of this will be pacified. The country is in [the process of] stable development. At the same time, each fundamental factor in our economy, which determines the sustainability of the economy, is at quite a good level… we have to work more actively to solve the problems that we face in the short-term period and to implement our government programme in a more effective way”, said Bakhtadze.
Russian president has ordered a ban on flights to Georgia as part of Russian state reaction to protest in Tbilisi following a Duma MP's appearance in the Tbilisi parliament. Photo: Nino Alavidze/Agenda.ge.
Bakhtadze also promised to protect the economic interest of each citizen who might be affected by the drop in tourists from Russia.
In such situations the most important recommendations come from the private sector, so from people who are really concerned and also have specific ideas on how to solve this problem. We have daily active communication with the private sector in order to agree on the actions that will help us avoid bad scenarios”, said Bakhtadze.
The National Bank of Georgia (NBG) also announced yesterday that the anticipated drop in tourists from Russia “is reflected on the currency market”.
The lari has depreciated in value against the US dollar and the euro in recent days by about 5 tetri, with 1 USD costing 2.8791 GEL (2.8470 as of yesterday), while 1 EUR costs 3.2758 GEL (3.2356 as of yesterday) today.
The lari has depreciated in value against the US dollar and the euro in recent days by about 5 tetri. Photo: Nino Alavidze/Agenda.ge.
Economic and trade diversification, the success of implemented reforms, its macroeconomic resilience, low public debt level and strong banking sector are the factors that insure economic resilience in the face of upcoming Russian sanctions on Georgia’s tourism and possibly on wine industry, says the Galt & Taggart, investment banking and investment management services company in Georgia.
- Read also GEORGIAN ECONOMY - EVERY CLOUD HAS A SILVER LINING study by Galt & Taggart.
Dealing with Russian sanctions is not a new challenge for Georgia. The 2006 Russian embargo forced Georgia to redirect its focus from Russian market, which expanded export destinations and improved quality of Georgian products. This also deepened economic ties with the rest of the world, with EU-Georgia free trade agreement signed in 2014, followed by free trade deals with China and other countries. We believe that upcoming Russian sanctions will further intensify Georgia’s economic diversification, use potential of new large markets – EU and China, and enhance its institutions”, said the Galt & Taggart.
Galt & Taggart states that recent Russian sanctions are expected to weigh on the Georgian economy, but unlike the 2006 Russian embargo, “the country is better placed to deal with negative shocks”.
The anticipated drop of tourists from from Russia, following Russian President Vladimir Putin’s ban on flights to Georgia this summer, “is reflected on the currency market”, announces the National Bank of Georgia (NBG).
Governor of the National Bank of Georgia (NBG) Koba Gvenetadze presented the annual report for 2018 at the Parliament of Georgia today and also answered questions of MPs regarding the recent fluctuation of the Georgian national currency lari. The Georgian national currency, the lari, has depreciated in value against the US dollar and the euro in recent weeks, with 1 USD costing 2.7344 GEL, while 1 EUR costs 3.4782GEL today.
“This is a short-term effect and will be regulated soon”
The Georgian national currency, the lari, has depreciated in value against the US dollar and the euro in recent days, with 1 USD costing 2.7799 GEL, while 1 EUR costs 3.0954 GEL.
The Georgian national currency, the lari, continues to depreciate in value against the US dollar as well as the euro. The National Bank of Georgia (NBG) explains that the presidential election period is the reason behind the depreciation.
Georgian PM's special representative for relations with Russia Zurab Abashidze said both Georgia and Russia are willing to preserve the positive dynamic of trade relations. Abashidze held a phone conversation with the Russian Deputy Foreign Minister Gregory Karasin yesterday.
Peaceful demonstrators have gathered on Rustaveli Avenue in central Tbilisi for the tenth consecutive day today, again demanding the resignation of Interior Minister Giorgi Gakharia. The protesters marched from the First Republic Square to the Freedom Square in sign of peaceful protest before they would resume the demonstration in front ot the parliament of Georgia.
The Georgian national currency, the lari, has depreciated in value against the US dollar and the euro in recent days, with 1 USD costing 2.9096 GEL, while 1 EUR costs 3.2599 GEL.
The National Bank of Georgia (NBG) sold $32.8 million on exchange auction earlier today as the Georgian lari continued to devalue. One US dollar cost 2.97 GEL as of today, while based on NBG forecast, it will cost about 2.93 tomorrow.