Government Offers New Plan to Boost Economy

PM Nika Gilauri said on June 30 the government elaborated “new financial package” mainly targeting the banking and construction sectors to boost the country’s economy.

The plan, presented by the Prime Minister, involves seeking additional USD 200 million from the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB), for Georgia’s commercial banks. The loan will be on top of USD 4.5 billion in international aid and loans pledged after the August war.

Plan to issue treasury bills worth of GEL 260 million is also part of the package, which the government said it would invest in infrastructure projects.

“Today the banking sector and companies have certain financial resources, but they refrain to invest those resources in the economy because of the risks associated with the economic crisis,” the government said in a statement. “In order to foster return of these resources back into the economy, the government launches issuing of treasury bills.”

The package also involves measures to ease regulations for banks, which, the government said, would allow them to free up over GEL 700 million – “an important stimulus for the banking sector to activate issuing of loans.”

The proposal also includes state-guaranteed loans to construction firms to foster their participation in the plan to resettle residents of old houses, which are in poor condition and located in the central districts of Tbilisi, to new ones, which will be constructed by the participating companies.

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