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Saakashvili concerned over Georgia's zero GDP growth

By Messenger Staff
Monday, July 1
President Mikheil Saakashvili addressed the Georgian Dream coalition to immediately renew infrastructural and economic projects, otherwise, he said the country will face economic catastrophe.

Saakashvili said in response to the data provided by the National Statistics Office of Georgia (Geostat) which has suggested that Georgia’s real Gross Domestic Product (GDP) growth in May on the annual basis was zero after 4.5% year-on-year increase in April.

Saakashvili said in his video address on June 29 that the “economic stagnation” creates a threat to the country’s national security. According to him, never since Eduard Shevardnadze’s presidency, aside from during the 2008 August War and the world economic crisis, had the Georgian economy been in “such a catastrophic situation.”

He said the government’s policies, “suspension of large-scale infrastructure projects,” Georgia’s “significantly deteriorated international reputation,” as well as “deterioration” on the legislative level, including amendments to the labor code, have negatively affected the country’s economy.

Saakashvili said he is ready to talk to PM Ivanishvili over these issues in order to take the relevant steps to save the country.

PM Ivanishvili’s adviser in economic issues, Gia Khukhashvili, said in response to the “hysteria” around the Geostat’s data that despite certain impediments, it is rather a psychological barrier which is essential during the transition period in the country.

“Let everyone calm down; everything will be very well, including the economic prosperity, social promotion and freedom of people,” Khukhashvili stated.

According to the Rapid Estimates of Economic Growth May 2013 of Geostat released on June 28, the real GDP growth equaled 2.2% in April-May 2013, while it equaled 2.3 percent in January-May, 2013.

Geostat produces monthly rapid estimations of real GDP growth using administrative data on VAT taxpayers’ turnover, fiscal and monetary statistics. Geostat explains that the compilation of rapid estimates is an internationally adopted practice to obtain preliminary monthly growth of real GDP. For those sectors, where preliminary monthly data does not exist (e.g. agriculture, non-observed economy etc.), the estimations are based on the data for previous periods. Therefore, the actual quarterly real GDP growth may significantly differ from monthly rapid estimates.