EBRD: Georgian Economy Healthy and Developing
By Ernest Petrosyan
Friday, December 16“The Georgian economy is developing well since the government maintains a very strong macroeconomic policy, while being prudent in managing fiscal and public debt, also conducting a flexible monetary policy,” said the European Bank of Reconstruction and Development (EBRD) Managing Director for Turkey, Eastern Europe, Caucasus and central Asia Olivier Descamps at a meeting with journalists.
According to the EBRD director’s assessment, the country is in a strong position, the banking sector has resumed growth, and the confidence of investors in general is positive which is proved by the investment demand in the country.
At the meeting Descamps emphasized the priority sectors, namely the hydro energy sector and agriculture - fields where Georgia has a comparative advantage, development of which can increase the country’s export and create more jobs opportunities. According to him the EBRD has applied about 60% of its 2011 credit portfolio towards agriculture.
“One of our innovations is that we issued credit to Georgian banks in GEL as a long term credit resource. I think the fact that commercial banks have to attract credit in USD; consumers find it more convenient to take credit in USD and this was why agro business was not developing. Risks in the agro sector are high and crediting it in USD would only increase these risks. As a result of our decision, the currency rate related to risks has been excluded,” said Descamps.
In 2011the EBRD invested about 250 million dollars in Georgia spread among 21 projects. Of those, 60% is destined for the financial sector, 25% to hydro power and the other 15% to the enterprise sector, manufacturing, agribusiness or services. “Our priorities will continue to be one of the main providers of long term innovative financing to the financial sector”, said Descamps.
Asked about the possible impact of the European financial crises, Descamps said that there will be indirect impact and no country can avoid that.