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Georgia is booming again, says Gilauri

By Salome Modebadze
Tuesday, May 4
Prime Minister of Georgia Nika Gilauri discussed the situation in the Georgian business sector at the Radisson Blu Iveria Hotel on May 3. The Prime Minister introduced the businessmen to the economic data for the first quarter of 2010.

“The presentation outlined the results of the first quarter, which state that Georgia has regained the indicators it had in the same quarter of 2008 – known as the quarter of economic boom. The results are absolutely positive in all directions,” the Prime Minister said, stressing that GDP had increased 4% compared with the same period in 2009. “The Georgian economy has overcome the crisis and started to grow. Growth this year will be about 5%, after a 3.9% contraction in 2009 due to declines in trade, services and the hospitality industry, so I hope the succeeding quarters will be even more successful,” he added. According to the information released tax revenue also increased 12.1% compared to the first quarter of last year, meaning it was only 4.1% less then in the same period of 2008.

The presentation outlined the development of various economic sectors, including tax and customs revenues, bank credits and deposits and the real estate sector. “There are many positive expectations for Georgia’s economy this year, with solid investments in prospect, especially from the Middle East. This process follows the slowing of foreign investment to a trickle after the war with Russia in August 2008 and the global economic slump,” Tamar Kovziridze, Deputy Minister of Economic Development, told the media.

Later Gilauri talked about the new Major Counselor’s Office. “This will be a new establishment in the Prime Minister’s Office which will study the private sector, defend the rights of property owners and inform the Government of their problems. I’m sure lots of private companies already have problems with different [State] departments and I want to be informed of these,” Gilauri said. He did not name any candidate for this post, but said the name would become known in the near future.

The Government of Georgia has prolonged the deadline for fulfilling investment obligations due to the difficult economic conditions, which means that any company can ask the Ministry of Economic Development for an extenson of the the defined deadline or a simplification of the terms of their investment until June 1, based on changes in the law on Privatisation of State Property and Local Self-Governing Units and Transmission of Usage Rights made by Parliament a fortnight ago. The regulations governing Presidential privatisation conditions are different, as here the Ministry of Economic Development must send the appeal to the Government. The Government then gives its opinion of the application to the President, who gives the final verdict on it.

Meanwhile the National Bank of Georgia has announced that the assets of commercial banks increased GEL 54.5 million in March compared to the previous month and now stand at GEL 8,473 million. The fixed assets of the bank sector are GEL 1,549.5 million – or 18.3% of the whole assets of the commercial banks - while the share of foreign capital in shareholders equity is 78.4%. According to the National Bank the overall profit of the Georgian banking sector in March was GEL 17 million.