Strict Crediting and the Skills of Manpower - ADB Names the Risks in Georgian Economy
“The highly-paid sector in terms of attracting the investments and fastening the growing process in Georgia will benefit from the education and development of the manpower”, - says the Asian Bank Development (ADB) Report.
ADB suggests that Georgia’s GDP will increase by 5%, which will be caused by the high investment expense, and by 2020 it might decrease insignificantly with reaching a total of 4.9%. The ADB outlook is the single most important economic report.
According to the report, in 2019 and 2020 the growth will be advanced with the help of export, consumption and investments which will be possible due to the high investment expenses. In 2019 in the financial sector the growth was observed, as well as in terms of wholesale, retail trading and construction.
ADB also suggests that the process of growth shall also fasten within agriculture with reaching 2.8%.
“In 2019, the inflation will increase up to 3.2% whereas in 2020 it will slow down and be only 3.0%. The strict credit standards should lower the credit growth to 13.0% in 2019, and in 2020 – 12.5%. The National Bank will most likely gradually reduce the early repayment fees by the end of 2020, in case the inflation level stays lower than 3.0%”, - states the report.
ADB notes, that thanks to the low internal investments and limited savings, in 2005 up until 2018, the significant capital source for Georgia has grown almost three times. “Direct foreign investments mostly come to existing labor-intensive work rather than to more complex and lucrative spheres, to name a few – manufacture. The lack of qualified manpower slows down the process of attracting the direct foreign investments. The inclusion of the private sector would help training the entrepreneurs, which, in turn, would motivate more women to get involved in business activities”, - reads the report.
Regarding the possible risks in the economy, it mostly relates to the external shocks, including the trade tension, the reduction of capital expenses and strict crediting.
“The growth might be more than expected, in this case, if for such important trading partners as Azerbaijan and Russia, the prognosis improves”, - writes ADB.
“With rising engagement within the chain of creating the favorable environment for the business and global values, Georgia has proved, that it is one of the attractive countries within the region for attaining direct foreign investments”, - stated the permanent representative of ADB in Georgia, Yesim Elhan-Kayalar. According to his words, Georgia is capable of gaining a significant economic profit with favoring the developing infrastructure which will strengthen the economic relations both in the region and within the country itself. “Vital outcome will be achieved by diversifying the economics and the export which should be followed by training and equipping the manpower with modern and advanced skills”.