Nodar Khaduri: Georgian economy is invulnerable to external shocks

Nodar Khaduri: Georgian economy is invulnerable to external shocks

There are no macroeconomic reasons for a devaluation of the lari for the moment, and a fiscal policy of the authorities has played not the last role in this. This statement was made by the head of the Ministry of Finance of Georgia, Nodar Khaduri.

"Georgia's economy has fully adapted to external shocks, and an important role was played by the fiscal policy in a process of adaptation,’’   Sputnik-Georgia quotes the Minister as saying.

The amendments that were made to the state budget for the current year on the basis of the new GDP growth forecast has allowed to keep a deficit at the level not higher than 3%, which has been welcomed by the International Monetary Fund. The authorities are counting on an over-fulfillment of the budget tax revenues, Khaduri said.

"According to the actual data,  nearly 1 billion lari ($ 435 million) has been mobilized in the budget for the seven months of 2015, compared to the same period of the  last year. In terms of allocations it was disbursed  580 million lari ($ 252.2 million) more compared with the corresponding period of 2014, indicating a trend of even spending of the budget, comparing to the previous years, " the Minister said.

Moreover, according to the head of the financial department, the funds, which will be received  from donors in the form of budgetary assistance this year, are $ 50 million more than a cost of servicing and repayment of the foreign debt, so that the situation in this area is fundamentally different from the previous years .  More than $ 81 million has been mobilized on fiscal accounts in the period from January to July, and by the end of the year another $ 110 million will have been accumulated.

The direct investment from abroad is slightly smaller than last year's record, but higher than those of 2012-2013. A forecast for 2015 is 1.186 million dollars.

The minister added that all forecasts are based on certain planned decisions, which have been already announced by companies.

"The flows of the foreign currency will be positive in the third and fourth quarters of 2015. A current account deficit exceeds the forecast of  the direct foreign investments,’’ Khaduri told, adding that other financial flows are expected.