The GEL exchange rate issue and price increase remains a challenge

The GEL exchange rate issue and price increase remains a challenge

Economic development, defense and social issues are the main points that the new Prime Minister will focus on. The document states that the country's economic policy is based on free market principles, where the private sector is the main driving force of the economy. The government's economic policy will focus on the structural improvement of the economy, the further development of the business and investment environment, promotion of small and medium size businesses and rapid development of infrastructure. In addition, the economic course of the new Prime Minister and Government aims to maximize involvement of state-owned resources in economic activity.

How is the new cabinet going to resolve one of the country's major problems: poverty and unemployment, and what steps is it planning to undertake? - These are the main questions regarding  Gakharia’s plan.

What are economic forecasts in the light of significant government changes? tried to find out at the Association of Young Financiers and Businessmen. The president of the Association, Shota Gulbani, is convinced that the experience in business sphere will help Giorgi Gakharia to make right decisions.

"First of all, it should be noted that the new Prime Minister has experience of working as a business ombudsman, which is a promising sign for private sector, as he is well aware of the problems and needs in business today.  Expectations from the private sector for Gakharia are mostly positive.  Due to our economic and geopolitical condition, it is difficult to invent any new model, nor do we have the time or opportunity to try given the fact people expect the results in a short period of time. That means Gakharia’s program is balanced and focused on resolving existing problems, " - said Shota Gulbani.

Shota Gulbani hopes that Gakharia's cabinet will be able to stabilize the GEL exchange rate, which, according to the expert, is a heavy burden on business and creates problems not only for businesses and citizens but also for the country's economy.

"Obviously, in the things that are under government control, such as Lari exchange rate and rising prices, will be challenging in 2020. I think that Gakharias’s government must fight this with disciplined fiscal and monetary policy: on the one hand by reducing the budget deficit as much as possible, and on the other hand by the National Bank of Georgia communicate with the private sector ", - said Gulbani.

The Association of Young Financiers and Businessmen believe that the key of solving unemployment problem - one of the most important issues facing the economy today, is the effort from the state to address the unemployment problem by improving its investment climate and business environment. Shota Gulbani believes that the public sector should not be the main employer. People need to start new businesses that are multiplied by government-supported programs.

Gulbani recommends to maintain and strengthen small and medium business programs, perhaps the program Produce in Georgia will contribute  to lowering the loan limits so that the benefits of the program become accessible to small farms. The priorities and directions need to be strengthened and the macro environment needs to be more stable.

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