Georgia’s economy: upturn expected in summer 2010

The economic crisis has hit Georgia in three major areas: money transfers, trade relations and credit resources. Money transfers into Georgia have decreased by 20% but the country managed to withstand this because transfers from Russia were worth only 7% of GDP. By comparison Armenia, which depended greatly on money transfers from Russia, was significantly damaged by the global decline in money transfers. The crisis affected Georgia’s export capability as well. This has been decreasing throughout this year.

The most critical situation for Georgia is the increase of its internal debts. Economic analyst Davit Narmania thinks that the amounts Georgia has received are not being spent in the right areas and have not promoted the economic development of the country. Despite such controversial developments IMF prognoses suggest that by mid 2010 the situation will start improving.