Economy Minister: development of capital market “priority” of Gov’t’s structural reforms

Georgian Economy Minister Levan Davitashvili on Thursday said development of the domestic capital market was “one of the most active directions” of the Government's structural reforms.

Speaking at the Capital Markets International Conference in Tbilisi, Davitashvili highlighted the importance of the capital market in the “economic picture of the country”, main aspects of its development and the role of the state in the process.

He said with the status of a European Union membership candidate country and the role of the Middle Corridor logistics route, Georgia had the ambition to become a “regional centre of financial services”.

We see the growth of the middle class and wealth in our region can mobilise more long-term capital”, he said.

The Minister assessed the current macroeconomic situation and main trends necessary for the development of the capital market, saying “all parameters” were present in the country for the capital market to become active, adding the Government had implemented “appropriate policies” to support this process.

There are two major macroeconomic trends that require the development of the capital market in the country. Georgia’s economy is undergoing significant structural transformation - on the one hand, there is a tendency to accumulate long-term domestic capital, which is caused by pension and insurance reforms, and on the other hand, there is an increasing demand for long-term capital, which is caused by our development policy”, he told the event.

In order to bridge these two current trends, it is vital to develop effective long-term capital allocation mechanisms. Achieving this goal is the main goal of the Government within the capital market reform”, Davitashvili said.

The Minister added the Government had improved relevant legislation over the past five years to create a “sustainable and predictable regulatory environment” for the capital market.