Georgian Prime Minister Irakli Garibashvili said that the government intends to revise downward existing 5% economic growth forecast amid depreciation of national currency lari and “very difficult situation” in the region.

He also said on February 21 that the government is also considering “tightening belts” and cutting administrative spending.

“Economic situation is very difficult in the region; there is a crisis in our region – Russia, Azerbaijan, Armenia, and in Europe in general. Georgia with its small economy is linked to this global economy. It naturally has a negative effect on our economy and we cannot be an exception and successful in such difficult situation,” Garibashvili told journalists.

“But we have concrete plans. Upon my instruction, the economic team is working actively in coordination with the National Bank,” he said. “We have prepared plans and all these components serve to improving the situation very quickly; we also have prepared a number of interesting mechanisms and proposals aimed at promoting investments – we will voice it quite soon.”

“We plan to revise economic growth figures,” he said. “We had forecasted 5% growth, but under such conditions we will probably have to revise it.”
 
“Since GEL depreciation had a significant negative effect on the pockets of our citizens, as well as on the companies’ finances, we [the government] are ready… to tighten our belts,” he said.

“We will probably also have to reduce administrative spending; we should review everything in order to spend our budget as much reasonably, purposefully and rationally as possible,” PM Garibashvili said after holding a presentation of a two-year GEL 15-million agricultural project aimed at assisting farmers through government’s co-financing.

Georgia’s economy grew 4.7% last year, short of government’s 5% forecast, according to preliminary data; government’s 2015 growth forecast is now at 5%.

The Georgian currency lari (GEL) further fell to 2.1771 on Friday per U.S. dollar from 2.1472 a day earlier.

Since early November, when GEL started depreciation, the Georgian currency lost 24.1% of its value against U.S. dollar and 11.9 % against euro.

Georgian exports continued downward trend in January, declining 30% year-on-year. The government has attributed decline mainly to decreasing exports to Russia and Ukraine.

Remittances also continued declining in January to USD 75.5 million, down by 23.3% compared to the same period of last year, caused by falling transfers from Russia.