Parliamentary elections - major challenge for the economy

Forthcoming elections always create an uncertain climate and result in slightly shaky economic development in a country. This is particularly the case in countries like Georgia with ongoing political and economic instability. Georgian analysts are concerned that the financing of different projects in the frame of ongoing pre-election campaigning is causing inflation processes which will in the end deteriorate the situation. In the pre-election period the ruling administration tends to initiate short term effective projects to win over voters. The country’s budget therefore goes on public spending creating the effect of welfare but in reality backfiring in terms of the economy. Social expenditure will be increased to create visible stability which will ultimately damage the economy.