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2009 difficult for Georgian economy

Tuesday, October 28
The August war put the Georgian economy in a difficult situation. In spite of substantial international support the aid which is given will be utilized in helping IDPs and restoring infrastructure rather than driving positive development. There will be little left to use for this purpose.

Economic analyst Demur Giorkhelidze states that the major threat to the country’s economy is the fact that economic activity has practically stopped in many areas. The IMF assesses that economic activity in Georgia has fallen by 60%. GDP growth in 2009 will be no more than 4%, much lower than in recent years.

The construction business, tourism and restaurants have received very serious losses and their problems are not over. Giorkhelidze thinks that the state should substantially support business; it should ensure credits are available and co-finance credit repayments. Small and medium-sized businesses are in a tragic situation, as they were not happy even before the war. They were always self-financing as they had little access to credit. Today few can survive and there is no tendency for development at all.

Former MP and Minister of Economy Professor Lado Papava thinks that only competent management can prevent an economic crisis in Georgia.