Georgian PM: main challenge for Georgian economy is creating new jobs, growing the middle class

Prime Minister Giorgi Gakharia has met with economic experts today to ask what type of problems they see in the Georgian economy and also discussed the state budget 2020 and exchange rate problems with them.

The main challenge for the Georgian economy is creating new jobs and growing the middle class”, announced the Georgian Prime Minister Giorgi Gakharia.

Today’s decision of the National Bank of Georgia to decrease the reserve requirement for commercial banks from 30 per cent to 25 per cent was assessed positively.

Experts say that about $700 million will be additionally involved in the economy as loans and it will strengthen the Georgian lari.

The government supports the NBG’s decision [decreasing the minimum reserve requirement] and will cooperate with National Bank of Georgia to stabilize the exchange rate and prices”, said Gakharia.

Economic analysts expressed a positive assessment of planned 5 per cent economic growth and the social responsibility of the state (increasing salaries and pensions).

Prime Minister Gakharia noted the importance of capital spending for economic growth. Photo: Government's press office.

Experts question increasing spending on subsidies which amounted to 550 million GEL ($184.9 mln/€169.6 mln) and say that increasing subsidies may not be the right way towards economic development.

Also, experts discussed government spending. They pointed out that planning infrastructural projects and capital spending should be used effectively.

Gakharia noted that the state budget for 2020 is based on social responsibility and fiscal discipline.

He noted the importance of capital spending for economic growth.

Effective capital spending is important. The efficacy of capital spending should be increased in social security, health care, infrastructure and regional spending”, said Gakharia.

Gakharia said that public institutions should take care to spend efficiently.