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Head of Georgia’s National Bank makes new call to cut expenses

by | Jul 16, 2015

National_BankTBILISI, DFWatch–The president of Georgia’s National Bank on Wednesday again asked the government to cut the budget, but the government has no plans to follow the recommendation.

Giorgi Kadagidze said the adjustments in the 2015 budget do not respond to the challenges Georgia is facing.

He said one billion USD less will flow into the country in the current, compared to last year.

“Today we have a richer state office than our economy is capable to bear,” he said.

Kadagize began warning the government about the need to cut expenses when there was a sharp drop in the value of the national currency, lari, a few months ago. A while ago, the government submitted a slimmer adjusted budget to parliament, and NBG immediately sent a letter of recommendation explaining the need to cut expenses.

The letter also reads that the social stability of people requires stable exchange rates  and it is necessary to have an ‘alternative policy’ which apart from cutting expenses includes the usage of tax mechanisms.

The recommendation about cutting expenses applies to cut in the current expenses.

A few days ago, the National Bank increased the refinancing rate by half a percent and announcing that it will increase it by a whole percent more by the end of the year.

But the government stands firmly on its position and does not plan to follow the NBG’s recommendation.



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