World Bank expert: Lari’s tumble is not result of Georgia’s weak economy

Chief Economist of the Europe and Central Asia region of the World Bank (WB) Hans Timmer believes the recent tumble of the value of the Georgian Lari has nothing to do with the weakness of the Georgian economy.

Timmer made the announcement after meeting the Georgia’s Prime Minister Irakli Garibashvili and representatives of the International Finance Corporation (IFC) and WB today.

"What has happened to the Georgian Lari in recent days has nothing to do with the weakness of the currency; it has nothing to do with the weakness of the Georgian economy. It is a real reflection of the changes of prices we see in all countries worldwide,” Timmer said.

He noted the price changes have crated challenges for the Georgian economy because "the Georgian economy was still part of dollarized economies".

"But it also creates lots of opportunities. And this opportunity is to [help the] Georgian economy go forward so that can become much more competitive in the exports sector,” Timmer said.

He was confident the country’s future growth would come from exports. "In that sense the fact is that a country that has a flexible exchange rate and can absorb this change that is coming from abroad."

Although the Georgian currency continued to depreciate in value against the US Dollar last week, it was only yesterday that the Lari strengthened. As of December 5, $1 USD was valued at 1.9455 GEL.

From November 18 to December 7, the value of the Georgian currency against the US Dollar dropped 10.6 percent.

Timmer underlined that the US Dollar has been appreciating in the world in the last few months.

Meanwhile, Georgia’s investment environment and improving the country's the local investment legislation to international standards was among the discussed topics at the meeting with Garibashvili and the representatives of the IFC and WB.