Some impacts of the world financial crisis

Some analysts, mostly official ones, employ the argument that due to the fact Georgia is not deeply integrated with the world economy the financial crisis will not have such a severe effect here as elsewhere. Independent experts however categorically deny this.

Irakli Lekvinadze thinks that the optimism of Georgian officials is misplaced. Quoting only a few factors is sufficient to demonstrate this: inflation has increased, investments have almost stopped, unemployment is increasing and so on.

Economist Nodar Khaduri quotes several ways in which the Georgian economy will be inevitably influenced by the global crisis. The first is that Georgia is an import-oriented country: if a crisis touches the countries we import from it will inevitably touch Georgia. One of the big sources of income for the Georgian population is also the money which Georgian emigrants send home from abroad. A large portion of these migrants have lost their jobs or have seen their earnings reduced, with the result that less money enters the country. The third argument is that despite import earnings exceeding export earnings many times over in Georgia certain items were still exported. However due to the financial crisis even these small exports are decreasing to almost zero, Khaduri says.