Fourth anti-crisis plan revealed:
How does the gov’t plan to support the construction sector?
A fourth anti-crisis plan is worth 434 million GEL and aims at supporting the construction and development sector of Georgia. Photo: Nino Alavidze/Agenda.ge.
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The Prime Minister of Georgia Giorgi Gakharia has presented a fourth anti-crisis plan today worth 434 million GEL aimed at supporting the construction and development sector of Georgia.
The first anti-crisis plan supports the tourism sector of Georgia, the second supports agriculture, the third - education and today we are presenting the fourth anti-crisis plan which is dedicated to the construction and development sector of Georgia, which before the pandemic accounted for 9 per cent of our gross domestic product", said Gakharia.
He said that the construction and development sector was one of the fastest growing sectors which employed 120,000 people in 2019. But Gakharia said that the anti-crisis plan will also support related businesses such as the production of construction materials, furniture manufacturing, trade in various equipment.
The plan maximally covers all social groups: people who have mortgage loans, who plan to take mortgage loans and our IDPs", said Gakharia.
The main challenges the construction and development sector faces and the anti-crisis plan aims to overcome are:
- Declining sales of residential apartments
- Possible fluctuations in prices of residential apartments
- Increased risk of incomplete constructions
- Decreased access to finances for development companies
Here are the key points of the plan:
The state will subsidise the interest rate of mortgage loans
The state will subsidise 4 per cent of the interest rate of the mortgage loan for 5 years. The subsidy will be issued for loans not exceeding 200,000 GEL and will only apply to those who will take mortgage loans to purchase newly built residential apartments from June 1, 2020 to January 1, 2021.
The state will issue loan guarantees on mortgage loans
The state will issue a loan guarantee to the amount of 20 per cent of the loan. The guarantee will last five years starting from the loan issuance date and will apply to loans where the participation is at least 10 per cent.
The state will buy three times more apartments than planned for IDP families
The state will spend 150 million GEL to buy about 1,800 apartments under construction in the period of 01/05/2020 - 01/01/2021. The purchase will be made through an auction, where the price should not exceed 1,700 GEL per 1 square meter.
The state will insure the completion of ongoing construction
Promoting the use of Escrow account in development activities
The total budget of the fourth anti-crisis plan is 434 million GEL which is to be divided the following way:
- 70 million GEL - subsidy of interest rate on mortgage loans by the state
- 14 million GEL - a state guarantee on a mortgage loan portfolio
- 150 million GEL- purchase of residential apartments for the IDPs
- 200 million GEL - a state guarantee for the completion of a residential real estate project
Gakharia said that the spread of the coronavirus is under control in Georgia and now is the time to strengthen the economy.
Farmers which have land plots between 0.25 to 10 hectares will receive 200 GEL for each hectare, said Minister of Agriculture Levan Davitashvili earlier today.
The Georgian government has presented a plan to gradually open the economy step-by-step over the next three months. Georgian Prime Minister Giorgi Gakharia said that restrictions on economic activity will begin being lifted starting April 27 and if the coronavirus situation does not worsen in the country in three months Georgian the economy will be fully reopened.
Georgia will spend 3.5 billion (about $1.10b/€1.02b) on its coronavirus anti-crisis plan, Georgian Prime Minister Giorgi Gakharia announced earlier today. "For now, the country will spend GEL 3.5 billion on managing the crisis, of which 1.035 billion GEL will be directed at social support of citizens, 2.11 billion GEL will be directed at the economy and entrepreneurs, while 350 million GEL will be spent on the health care of each citizen", Gakharia said.
The government of Georgia will unveil an anti-crisis economic recovery plan on April 24, 2020, which will include measures for targeted social and business support.
Georgia has reported eight new cases of the coronavirus, bringing the total number of cases to 746. 576 of the 746 patients have recovered, while 12 others have died. As of today, 158 people remain infected with COVID-19 in Georgia. All municipal transport systems – busses, metro, marshrutkas and cableways – have resumed today. Passengers must wear face masks while using the municipal transport.
Georgian Prime Minister Giorgi Gakharia has presented the anti-crisis budget for 2020 at the Inter-Agency Coordination Council today in response to the before sending it to the Parliament of Georgia later today. "The reason and purpose of our meeting today is the anti-crisis budget for 2020. We all understand very well that the epidemic has pushed the country back economically. Today the budget will be presented to parliament and you are all here to discuss it and change our opinions", Gakharia said.
International economists delivered a presentation on the global pandemic and its aftermath on the economy to the Georgian government today, saying the steps taken by the Georgian government to improve the business environment and increase investment attractiveness are 'right and important', announces the government of Georgia.
As the shock of the pandemic is expected to last until the end of the year the government of Georgia is taking actions to further support individuals affected by the crisis. "Despite all the positive tendencies, the shock of the pandemic will last until the end of the year. Therefore, we should reexamine every social group and allocate resources for citizens who are in special need. I also want to emphasise that as of today, 721,000 citizens have already received social assistance packages which had been created by the government", said Gakharia.
Georgia has reported four new cases of the coronavirus earlier today, bringing the total number of cases to 1,010. 885 of the 1,010 patients have recovered, while 15 others have died. As of today 110 people remain infected with COVID-19 in Georgia.10 more Georgian soldiers have tested positive for the coronavirus in Afghanistan who have been transported to Georgia earlier today via the German Air Force. Eight of the 28 Georgian soldiers who tested positive for the coronavirus in Afghanistan on July 10 have recovered.
What support can Georgian citizens expect?
The government of Georgia has announced the third phase of its anti-crisis plan in order to ease the burden caused by the coronavirus crisis.
Families will receive one-time assistance of 200 GEL per child from the state, announces Georgian Prime Minister Giorgi Gakharia.
Georgian Prime Minister Giorgi Gakharia stated today that 'we are entering a long-lasting, deep economic crisis' and if this economic downturn continues 'we will have to announce another social package at the beginning of the next year'.
The Georgian government has announced a 100 million GEL ($32.46 mln/€27.48 mln) tender to ensure the completion of unfinished construction projects. The government will then sign a sale option agreement with the winners of the tender and purchase not more than 30 per cent of the total living space of each building.
The state has already subsidised about 90 million GEL worth of mortgages since the introduction of the programme back in late May, President of the Banking Association of Georgia Alexandre Dzneladze has announced.
Georgian Economy Minister Natia Turnava says that the increased rate of foreign direct investment in the second quarter of 2020 proves that despite the pandemic the Georgian economy is gradually recovering.