Economy, News

Government’s goal of 6% growth seen as unrealistic

by | Jul 5, 2013
Nodar Khaduri

Finance Minister Nodar Khaduri. (Interpressnews.)

TBILISI, DFWatch–Despite the prime minister’s prognosis and the state budget, the minister of economy and the minister of finance say it is impossible to achieve 6 percent economic growth by the end of the year.

Minister of Economy Giorgi Kvirikashvili said on Wednesday that it is unrealistic to achieve 6 percent economic growth.

“We think it is still possible to achieve 4.5-5 percent growth, but many preconditions are necessary for this,” he said, “including to stop black PR which is spread all over the world and has great importance.”

The minister of economy continued saying that the government is taking measures to remove all factors which are preventing economic growth.

“Yesterday our economic group had a meeting and we agreed to plan active steps in order to remove blocking factors,” he said.

Finance Minister Nodar Khaduri said in his opinion the country can only achieve economic growth through developing the business sector.

The economic growth in May of 2013 was 0 percent, causing a wave of criticism against the new government.

Khaduri tried to explain why this happened, and used an example of a company which had 168 million in turnover last year but hasn’t done anything before or after.

“We are studying where such companies are coming from and where they go,” he said after the government session on Wednesday.

He said that in 2012, a lot of money was spent on construction of the new parliament building, construction of houses of justice, and other projects.

At Wednesday’s press conference, the prime minister said that the previous government didn’t have good economic growth but only ‘collected money’.

He said there are many reasons why there was no economic growth in May, like incorrectly conducted tenders, while many projects need to be suspended.

“The economy must only be developed by business, but Saakashvili’s government taught business and it was controlled from one center. This person knows nothing about economy,” Khaduri said.

The finance minister added that the only thing the previous government did was to accumulate large amounts of the budget income.

The prime minister said the economy must be competitive and free.

“No-one should have the right to intervene in the economy.”

According to preliminary data from Georgia’s National Statistics Department, the growth in gross domestic product (GDP) in May 2013 was 0.0 percent compared to same period of 2012, while the growth of GDP in April-May was 2.2 percent. The growth was 2.3 percent during January-May, 2013.

The government’s prognosis is that there will be 6 percent economic growth by the end of 2013, but the number stands far from estimates by international organizations and agencies.

For example, EBRD’s prognosis for Georgia was reduced from 5 percent to 3 percent for the year 2013. http://www.ebrd.com/downloads/research/REP/rep-may-2013.pdf

“Georgia’s economic growth slowed down at the end of 2012, likely due to lower investment and uncertainty related to post-election political transition,” EBRD’s report reads. “Uncertainty about the external environment has been mitigated by a precautionary arrangement with the IMF. Further normalization of trade relations with Russia should help support export-led growth over time.”



ads
ads
ads

No Comments, Leave a comment

You must be logged in to post a comment.

Browse our archive by date

September 2017
M T W T F S S
« Aug    
 123
45678910
11121314151617
18192021222324
252627282930