Meeting of the Government as of December 28, 2010

Meeting of the Government as of December 28, 2010 On December 28, 2010 was held the meeting of the Georgian Government. The agenda included 78 items.

Before the meeting started, the Prime Minister of Georgia, Nika Gilauri, summarized the results of 2010. We present the Prime Minister's speech:

"Good day.

The year 2010 is coming to an end. [Today] we have one of the last government meetings in 2010. We can start talking about certain results and summarizing the year 2010. I will definitely have a separate meeting with journalists at which I will discuss the issues which are interesting for the public in detail. We will definitely talk about the results of 2010 - what we wanted to do, what we have done, and what we want to do in 2011. I ask all the ministers to give the public detailed and comprehensive information about the activities of their ministries - what was done in 2010, what results we have, what failed to be done, what problems we had, and what we want to do in 2011.

Today I would like to present statistical figures - the results and macroeconomic parameters of 2010 - to the public. They are interesting both for the public and for the private sector and business people.

The main figures are very good and positive, much higher than we expected. However, there are a couple of parameters and indicators in which I would like to see better figures.

The good news is that the figure of GDP growth of the first three quarters is 6.5%. The annual figure of 2010 will presumably be in the vicinity of 6.5%, somewhere around 6.3% and higher. And this is very good.

I would like to remind you that in December last year, exactly 12 months ago, we debated with the International Monetary Fund about whether the growth in 2010 would be 1.5% or 2.5%. Finally, we agreed on 2%.

The initial expectation of not only us, but also of the International Monetary Fund and international experts was that the country would have a 2% economic growth. Today, we are finishing the year with a 6.5% economic growth, which is not bad. This gives us certain optimism about the economic growth of the next year.

What was the main driving force of the economic growth? There were several directions. The first one was export. Exports have increased by 35%. According to the figures of 2010, there is quite a good growth: there was growth in the banking sector, in deposits; the credit portfolio is record-high, the highest the Georgian banking sector has ever had. The deposits have grown by 27% compared to the figures of the beginning of the year; the credits have grown by 18%.

One of the main driving forces was tourism. We definitely didn't expect so many visitors during this year. It is very good, because tourism is a healthy business which has had a very good and positive influence on the economy. The number of visitors has increased by 40% compared to last year, which is also a very high figure.

We had growth in the real sector. If we take registration of vehicles and real estate, the growth amounts to 20-21% in both directions, which is also a healthy development and has had a good influence on the economy.

I would like to name two figures: the current account deficit and the budget deficit. We had a very high budget deficit in 2009 - 9.2%. We planned this year with a 7.4% budget deficit, but we are finishing it with 6%, which is not a bad figure. There has been a 33% decrease in the budget deficit compared to 2009.

And finally, the current account deficit. We have one of the best figures here - in 2010, the current account deficit will amount to about 11.2%. Which figures are bad and what I would like to be better? It is private direct investments, the so-called FDIs, which, according to the figures of the first three quarters, amount to approximately to $450-560 million, which is not a big figure, and I would like them to be bigger. In the fourth quarter, we are expecting better figures, though the total amount of private direct investments in 2010 won't be so high, it could have been higher. I hope that in 2011 it will be higher.

In this case, FDIs were replaced by foreign inflows from international financial institutions, which means that we have received quite large sums from the World Bank, the EBRD, and the Asian Development Bank. International inflows were quite high, despite the fact that private inflows were not so high.

Another parameter which I would like to be better is the inflation rate. So far, the inflation rate is 10.5%, and the result of 2010 will be about the same. This reflects negatively on the population, especially now when the prices of food products and items of primary consumption have risen.

We are doing everything a government can do. It's really impossible to stop inflation or introduce the regulation of prices, to push the prices down. This is not a competence of the government. This has been caused by the inflation on international markets, which is also reflected on Georgia. We already have programs that are necessary to alleviate the problem of price hikes for the population. We have agricultural programs that are designed to replace the imported products with local products starting from 2011."


Prime Minister's Press Service