Challenges for the Georgian economy

The Russian intervention has influenced the Georgian economy badly. Even after the ceasefire Russian armed units continue destroying the country’s economic infrastructure, railways, communication facilities, ports and roads.

The country is suffering great losses. Its transit function is damaged. Most import-export operations are suspended. Some customers started to withdraw their savings from the banks in panic, with the result that banks stopped authorizing overdrafts and limited loans. All this could yield some disastrous results. When the Russians finally pull out, as they eventually will, the country will need huge investments but prospective investors will be very cautious as they would need guarantees that the Russian aggression is never repeated.

Experts think that political stability will need to be established first in order to facilitate economic stability. The rebuilding of the economic infrastructure will take several months and to return the economy to the level it was at before the war might take more time. Of course, serious support from the international community however might expedite this process.