JUNE 2013 - FEAS
JUNE 2013 - FEAS
JUNE 2013 - FEAS
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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT <strong>JUNE</strong> <strong>2013</strong><br />
GEORGIAN STOCK EXCHANGE<br />
CAPITAL MARKET DEVELOPMENT<br />
AND ECONOMIC OUTLOOK<br />
Mark Griffiths, IMF Mission Chief for Georgia<br />
commenting on <strong>2013</strong> economic outlook for<br />
Georgia noted: “GDP growth could reach 6<br />
percent. This forecast is subject to risks. On<br />
the upside, there is the possibility of increased<br />
trade with Russia and of new sources of foreign<br />
investment. However, if the current uncertainty<br />
persists or demand from trading partners falters,<br />
then growth could be lower. Strong domestic<br />
policies and communication are needed to<br />
instill confidence and to reassure markets that<br />
the new government is committed to prudent<br />
macroeconomic policies and further enhancing<br />
Georgia’s business-friendly environment.<br />
“Inflation has remained very low in 2012 due<br />
to the earlier nominal appreciation of the lari<br />
against currencies of Georgia’s main trading<br />
partners, and declines in food prices over<br />
the last 12 months. As the impact of these<br />
temporary factors wears off, the mission<br />
projects that inflation will increase from -0.5<br />
percent in November to 4 percent by end-<br />
<strong>2013</strong>, and gradually move toward the medium<br />
term inflation objective of the National Bank of<br />
Georgia (NBG). The mission considers that the<br />
monetary policy stance, including the recent cut<br />
in official interest rates, is broadly appropriate<br />
and consistent with the projected rise in<br />
inflation.<br />
“The draft <strong>2013</strong> budget is socially oriented yet<br />
prudent. It increases social spending to protect<br />
the most vulnerable, while continuing with the<br />
path of fiscal consolidation. The fiscal deficit is<br />
projected to decline to 2.8 percent of GDP in<br />
<strong>2013</strong>. This will facilitate external adjustment and<br />
create room for countercyclical fiscal policy.<br />
This is consistent with the medium-term strategy<br />
to bring the deficit down to about 1π percent<br />
of GDP by 2016 and should keep Georgia’s<br />
government’s debt-to-GDP ratio on a firm<br />
downward path.”<br />
As for the business climate in the country, the<br />
country has made remarkable strides over<br />
the last few years—the World Bank’s Doing<br />
Business Index ranks Georgia as 9th in the<br />
world, first in Eastern Europe and Central Asia<br />
and first among lower middle-income countries.<br />
In the program of the Georgian Dream - the<br />
2012 parliamentary elections winner coalition<br />
and respectively in the new Government’s<br />
plans important place is devoted to further<br />
improvement of the investment environment<br />
and implementation of the pension reform in<br />
the country. This provides grounds for optimism<br />
and new momentum for development of the<br />
Georgian capital market.<br />
Key Information Contacts<br />
National Bank of Georgia www.nbg.gov.ge<br />
Ministry of Finance of Georgia www.mof.ge<br />
Georgian Central Securities Depository www.gcsd.ge<br />
Georgian Corporate Directors Association www.gcda.ge<br />
CONTACT INFORMATION<br />
Contact Name Mr. George Loladze E-mail info@gse.ge Website www.gse.ge<br />
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