WHAT TENDENCIES ARE OBSERVED IN GEORGIA AND WHAT ARE WE EXPECTING

Dr. Emzar Djgerenaia

B asic tendencies in Georgian economy are of great importance during the stagnation of world economy. Since 1997 there has been decrease in GDP in our country, which was shown in US dollars.

Given the fact that in 1997 exchange rate of GEL made up 1,31 and 1,41; 1,8; 2,0; 2,2 in the years onward, there was also a decrease in the budget of exchange revenues.
At the same time, difference in incomes and expenses of population made up 1 billion GEL, i.e. in 1997-2000 Georgians spent 5 billions GEL – more than they earned. Given the fact that their savings devaluated last year, we will see that this money comes from illegal economy. Besides, these are officially registered revenues and expenses spent in legal sector. The rest part is illegal. Proceeding from this, there is growth in money turnover in illegal sector. As a whole, real incomesof population decrease. Consumer marketin Georgia is reducing, which, eventually, leads to unemployment and decrease of business. At the same time, in 2002-2003 there will not be an economic growth in the developing countries. The year 2003 will be a year of elections. Proceeding from this, there will be increase in budget deficit due to the pressure of deputies. Living conditions will deteriorate more.
If the Government does not take any decisive economic measures, the economic downturn will become even worse; real social situation will accelerate and budget revenues will fall. Business crisis as well as investment hunger will lead Georgia to complete economic stagnation.