Economic Press Monitor January 22 - 28, 2017	Days:  14 21 28 04 11

economic & politics

BANKEBI DA FINANSEBI: “NATIONAL CURRENCY SHOULD BE ABOLISHED, BECAUSE IT FAILS ACTUALLY TO FULFILL ITS FUNCTIONS”

January 26, 2017 - Paata Sheshelidze, president of New Economic School – Georgia, believes that lari replacement “is necessary, otherwise we will face much more serious problems”. “These problems are mostly expressed in frequent use of National Bank for political manipulations”, he states.




BANKEBI DA FINANSEBI: “PAATA BAIRAKHTARI: TOBACCO SMUGGLING WILL INCREASE MORE”

January 26, 2017 - Paata Bairakhtari, analyst at Young Financers and Businessmen Association, speaks about risks of smuggling growth due to raise of excise on tobacco products. “It is impossible risks of smuggling not to appear, when cigarettes in your bordering countries are cheaper by 40-50%”, he points.




IVERIA.BIZ: “IMPOVERISHMENT OF POPULATION, AS BASIC FACTOR OF INFLATION DROP, AND PROSPECTS OF GEORGIAN ECONOMY – CONCEPT OF DEMAND STIMULATION”

January 26, 2017 - The article points that sharp drop of inflation had started already in the second half of 2016 and by December, the rate has reached unprecedentedly low level.

“The government boasts exactly with this fact and is trying to use it in order to cover up the loss, inflicted on people by devaluation of lari”, author of the article states.




NETGAZETI.GE: ““BLOOMBERG” ESTIMATED GEORGIA AS HIGH-RISK COUNTRY IN TERMS OF INVESTMENTS”

January 25, 2017 - Bloomberg’s rating “Global Risk Briefing” placed Georgia among high-risk countries in terms of investments, the newspaper reports.

According to the rating, Georgia is more risky country for investors than Russia, Turkey and Ukraine, the article says.




LIBERALI: “ZURAB JAPARIDZE: THIS IS THE ONLY RECEIPT, HOW COULD THE COUNTRY DEVELOP ECONOMICALLY”

January 24, 2017 - New Political Center Girchi submits to the constitutional commission “the receipt” of amendments to the Constitution in order to promote rate of the country’s economic growth, the magazine reports.

Chairman of Girchi Zurab Japaridze says that the major challenge for Georgia is very low rate of economic development and the most important amendments in the Constitution should refer to economics.

macroeconomics & budget

TABULA: “TABUASHVILI: VAT HAS NOT A DEFICIT, BUT REDUCTION IN COMPARISON WITH THE PREVIOUS YEAR”

January 27, 2017 - State Treasury Service reported that planned volume of VAT in 2016 was 3.8 billion lari, while factual mobilization made up 86%, i.e. the plan had deficiency of 515.6 million lari.

Responding to the magazine’s question regarding reasons of gap in VAT mobilization, Deputy Finance Minister and head of the Revenue Service Giorgi Tabuashvili responded that “Deficiency is not a proper word”.




REZONANSI: “COMPANIES’ TURNOVER DECREASES, THE BUDGET WILL NOT AVOID A PROBLEM”

January 24, 2017 - Analyst Gia Khukhashvili states that “In the country, where social risk is increased, purchasing power of average Georgian has fallen sharply”. “This causes stagnation, which finally ends in shrinkage of economic activity”, he points, noting that over the past period, many stores are closing due to decreased turnover.




REZONANSI: “INFLATION IS INCREASING, NATIONAL BANK SHOULD RAISE MONEY IN PRICE”

January 24, 2017 - Refinancing rate, making up 6.5% now, has not been changed since September. If until now, National Bank of Georgia (NBG) justified maintenance of monetary policy rate by low level of inflation, now this parameter has been changed too, the newspaper says.




THE FINANCIAL: “DO GEORGIANS CONSUME LESS KHACHAPURI?”

January 23, 2017 - In December of 2016, average cost of cooking one standard khachapuri (Georgian cake with cheese) made up 3.62 lari, decreasing by 4% year-on-year, while increasing by 4.6% month-on-month, the newspaper reports.

Main contributor to year-on-year decline of so-called “Khachapuri Index” (Georgian analog to The Economist’s “Big Mac Index”, measured by ISET, International School of Economics at Tbilisi State University) was price decrease on cheese (by 4.3%) and flour (by 9.2%).

energy, oil & gas

TABULA: “GAKHARIA: AGREEMENT WITH “GAZPROM” IS NOT A VICTORY IN ECONOMIC PART”

January 27, 2017 - Giorgi Gakharia, Minister of Economy and Sustainable Development, states that “Agreement [with Russian gas giant Gazprom] is not a victory in economic part”.

“Most attacks on this agreement claim growth of political risks, while this in not true”, the Minister says.




NETGAZETI.GE: “VALISHVILI: DESIRE EXISTS, BUT IT IS DIFFICULT TO GUARANTEE PUBLICIZING OF THE CONTRACT WITH “GAZPROM””

January 26, 2017 - Deputy Energy Minister Mariam Valishvili declared that Georgian side negotiates with Russian gas giant Gazprom on publicizing of details of the contract, the newspaper says.

The contract will be publicized “based upon the possibility, it is very difficult to guarantee, because we have all contracts [classified]”, Valishvili said.




REZONANSI: “WHAT WILL BE CHANGED BY ABKHAZIA’S BLACKOUT”

January 23, 2017 - Referring to Abkhazian media, the newspaper reports that due to decrease of water level in EngurHES, power supply to Abkhazia may be cancelled from February 15.

Gia Khubua, technical director of EngurHES, also says that water level in the hydroelectric station’s water reservoir makes up 453 m now, while the norm is 510 m.

conflict and court

TABULA: “SAMUSHIA: DETAINEES ON SO-CALLED CABLES’ CASE TO BE RELEASED IN 2 MONTHS”

January 27, 2017 - Court of Appeals has changed accusation on so-called cables’ case and left only abuse of the authority, the magazine reports.

As the lawyer Levan Samushia says, “It was confirmed that there was not an embezzlement”.

companies

REZONANSI: “SHELVES IN STORES ARE GETTING EMPTY”

January 24, 2017 - Iva Chkonia, president of distribution company Grand, says that “Increased price on fuel and devaluation of lari forced us to raise price on production”. “The only way to avoid the uncertainty is increase of price by trade outlets on those products, which are already raised in price by distributors, and we will continue cooperation as before”, he considers.

ecology & health

REZONANSI: “10 HOSPITALS ARE EXPELLED FROM UNIVERSAL HEALTHCARE PROGRAM”

January 27, 2017 - From February 1, about 10 hospitals will be withdrawn from universal healthcare program – the Healthcare Ministry cancels cooperation with them, the newspaper reports. As the article points, more hospitals may share the fate of these 10 ones from March 1.

finances & banking

BANKEBI DA FINANSEBI: “VOLUME OF REFINANCING LOANS, ISSUED TO COMMERCIAL BANKS, IS ALARMING”

January 25, 2017 - Doctor of economics David Aslanishvili estimates that “in small scale, refinancing loans are good, while a big volume is already a sign of alarming situation”.

In Georgia, refinancing loans amount to 1.3 billion lari, while monetary aggregate M2 makes up 6.5 billion lari, Aslanishvili points.




BANKEBI DA FINANSEBI: “MORE THAN 2,000 PEOPLE APPLIED TO COMMERCIAL BANKS FOR LOANS’ LARIZATION”

January 23, 2017 - Zurab Gvasalia, president of Georgian Banks Association, reported that on the third day after launch of larization program, more than 2,000 people applied to commercial banks with request to convert their loans, issued in the US dollar, to ones in national currency. Average rate of interest on the converted loans makes up 10-11%.




KVIRIS PALITRA: “CONTRACT WITH BANKRUPTCY!”

January 23, 2017 - Depositors of MFX Broker Georgia complain that they have not received accrued interests already for 2 months, the company’s Tbilisi office is closed, while according to their information, founder of the company heft the country, the newspaper says.

In the company, which promised annual yield of 35%, 45% and sometimes even 92%, more than 300 people deposited their money, starting from $5 and exceeding $100,000 in some cases, the article reports.