GDP growth has brought the crisis to an end, says Gilauri

Macroeconomic development in Georgia increased GDP in the 4th quarter of 2009 and has brought the economic crisis to an end, Nika Gilauri, the Prime Minister of Georgia, told his colleagues at the Government meeting on February 2. Gilauri stressed that ongoing reforms will support further economic development and the forecast that GDP will increase 2% in 2010 will be shown to be correct. He added that growth may even exceed expectations.

“GDP increased 1.5% in the 4th quarter of 2009 compared with the same period of 2008, while in December it increased by 2.7% over December 2008. The increase in tax income was about 5%, while GDP increased 12% in January 2010 compared to the previous year,” the PM told Ministers, adding that the exact GDP figures will be ready for March 2010 but he was still able to present approximate numbers. The PM highlighted that there is a tendency of rapid increase in economic activity throughout the country.

Gilauri also spoke about changes in the real estate market, pointing out that the number of property registrations had increased 52% in January 2010 and the number building permits issued doubled compared with the previous year. He welcomed this new tendency in the sector.

On the same day Kakha Baindurashvili, Minister of Finance of Georgia, met businessmen at the Sheraton Metekhi Palace Hotel to introduce the latest Government initiative of unifying the customs and tax codes. The main aim of this initiative is to encourage the business sector and promote its activity by simplifying the taxation system, the Minister said.

“A single code will be absolutely beneficial for local employers and importers. The Customs Office will cease to exist as a separate structural unit and a united Department of Revenue will deal with the whole tax administration process,” Baindurashvili told the businessmen. “The unification of tax and customs codes is an important initiative for both local employers and importers. The Ministry will work on new projects with the business sector in near future,” Baindurashvili added, highlighting that a special commission will be created in order to promote business activities.

The sides also discussed the issue of VAT for employers and the participation and membership of the business sector in the Tax Disputes Council. “This is the second time our association has met the Minister of Finance. We presented to him the problem of industrial waste, a law on which came into force on January 1. This issue is important for both oil companies and wine producers,” Giorgi Chirakadze, President of the Association of Georgian Businessmen, told the media. Representatives of the business sector discussed their problems with the Minister, welcomed the new initiative and expressed their full support. The Messenger asked Gia Khukhashvili to express his opinion on the GDP growth projections and the unification of the tax and customs codes from the viewpoint of an economic analyst. “Actually I can see nothing wrong in the unification of the tax and customs codes if this reform is made within an appropriate legislative framework and the additional costs of those duties are obviated. As for the GDP increase, I doubt that the real social and economic situation meets the parameters presented by the Government. Economic growth figures shouldn’t become the subject of manipulation,” Khukhashvili said.