Unprepared Georgia facing high economic risks caused by coronavirus outbreak

TBILISI(BPI)-The world is on the verge of a serious economic crisis caused by the coronavirus, and Georgia is no exception. The country has already been experiencing its negative consequences  – the tourism industry has practically collapsed, exports have declined, the collapse of the national currency has been resumed.

Is the government set to take any measures to mitigate the crisis given   that it can’t be prevented due to its global nature?

The Ministry of Economy refrains from making any comment on the matter, the Ministry of Finance is set  to use appropriate fiscal and monetary instruments to stimulate the economy.

“we  are holding sectoral meetings with business to find out  which areas will be under attack, and what should be done to mitigate pressure on them,” the Ministry of Economy says.

In the words of the expert Zviad Khorguashvili, the country is unprepared for the economic risks associated with coronavirus. This is not the first external factor that negatively affects the country’s economy and  every time the government could not do anything to cope with  these risks.

“The government should offer the country a way out of this situation, but this should not be subsidies to  certain sectors of the economy. To cut taxes and reduce regulations would be the best solution,” he explains.

According to the expert, the economies of several countries are facing gravest threat  but poor countries such as Georgia will suffer the most.

“Now when the country is facing very high risks of economic shock and recession, the government should take all the steps to maintain the current investment volumes,  for this it should reduce the number of regulations, especially  lending  regulations for  the real estate sector. The construction industry traditionally has the lowest level of resistance, and in any crisis faces gravest threat, ”the expert says.

Khorguashvili believes that the government should also choose in which sectors it is most profitable to reduce taxes to stimulate their growth.

“The country sees a rather high inflation, to reduce it, excise taxes and VAT should be cut. First of all, this concerns petroleum products, since a decline in fuel prices will automatically lower prices for other goods, ”Zviad Khorguashvili stresses.

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