Economics

Lari turns 30 years old, while the first national currency Georgian boni 105

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Tbilisi (GBC) - "The time has come to talk about the necessity of one's money sign...", - Konstantine Kandelaki wrote 105 years ago.

The National Bank recalls what the Minister of Finance and Trade-Industry of the Democratic Republic of Georgia said in the last century, one year before the 30th anniversary of the national currency.

On July 11, 1919, the first national currency #Georgian boni was put into circulation, which was one of the most important attributes of the sovereign state.

Sketches were developed by artists - Joseph Charlemagne, Henrikh Hrinevski and Dimitri Shevardnadze. The coat of arms of the Democratic Republic of Georgia and the initials "SDR" are depicted on the money.

Georgian bonds circulated in 1919-1921 and were a means of temporary payment. From 1921 to 2023, the Georgian manet of the Soviet Socialist Republic was in circulation.

In 1923, when Georgia became part of the Transcaucasian Socialist Federated Soviet Republic, the Georgian manat was replaced by the 2nd South Caucasian ruble, and from 1937* by the unified currency of the USSR.

As you remember (don't anyone who remembers), Georgia came out of the Soviet money zone in 1993 (April 5) and introduced a coupon, as well as a temporary payment method. Lari appeared on October 2, 1995, during the tenure of Davit Iakobidze as the Minister of Finance.

Since its birth, since the lari has been in circulation of a sovereign country, the country is preparing for European integration, and the lari is going to give up its positions only for Euro.

სიახლეები ამავე კატეგორიიდან

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Total volume of non-bank deposits in the country was up by 2.72% in Se...

The larization ratio of total non-bank deposits constituted 51.2% by the end of September 2024 and decreased by 0.97 percentage points compared to the end of August 2024.The market interest rate on term deposits consisted 7.01%. In particular, the market interest rate for foreign currency-denominated deposits was 2.40%.The share of USD in the total volume of foreign currency-denominated deposits equals 77.76% and the share of the EUR equals 20.13%.

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NBG is selling USD, but it is still strengthening

At Monday's auction, the NBG sold $40 million and with this transaction removed 109 million GEL from the turnover (exchange rate: $1/2.7199).In the previous weeks, the amount of GEL was reduced to 340 million GEL, with 2 interventions. Before the sale of $60 million, the market offered $70 million, from which the system took up to $65 million. Before that, it was $48.5 million, on October 8 (exchange rate: $1/GEL 2.7194), when it brought out $60 million.In addition, the NBG is also active on the Bmatch platform. It is difficult to maintain a positive balance, it can be said for sure, until the publication of October statistics (25.11/2024).After the MPC of October 23, the acting president of the NBG did not hold a briefing. On the previous one, she reported a positive balance of $66.8 million (the NBG bought $286.6 million more than it sold).The NBG First Vice-President presented the statistics of transactions of the year, as of August, with both mechanisms (auction and Bmatch platform). $219.7 million was sold, including $168.7 at the foreign exchange auction, $51 at Bmatch. The currency is issued by the NBG sometimes to balance the excess volatility, to respond to the agitation caused by the one-time factor, to prevent negative expectations. Recently, the factors have increased and the regulator had to react more than once.September sales on Bmatch are already $106.5 million. October statistics are only for auctions and sales exceed $200 million.

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Georgian PM welcomes visiting Hungarian counterpart

According to the information disseminated by the government administration, the head of the Georgian government Irakli Kobakhidze hosted the Hungarian colleague. The national anthems of the two countries were performed. The Prime Ministers of Georgia and Hungary introduced the members of the delegation to each other.As part of the official visit, a face-to-face meeting between Irakli Kobakhidze and Viktor Orban will be held in an extended format, after which the Prime Ministers will make joint statements to the media.On Monday, October 28, the highest representative of the European Commission, Joseph Borrell, said that Hungarian Prime Minister Orban, who is expected to come to Georgia to show support for the government, does not represent the European Union. “He is traveling to Georgia... presumably to show his support for the Georgian government. Whatever Mr. Orban may say during his visit, he does not represent the European Union," Borrell said.The Prime Minister of Hungary, Viktor Orban, is the first and only European leader who congratulated "Georgian Dream" on the election victory."I congratulate Prime Minister Kobakhidze and "Georgian Dream" on their victory in the parliamentary elections. People in Georgia know what is best for their country and today their voice was heard!", Viktor Orban wrote on Platform X on October 26, after announcing the results of the exit poll conducted by "Imedi" TV.Viktor Orbani is now a great friend of "Georgian Dream", as well as the Russian President - Putin. The Prime Minister of Hungary Viktor Orban is considered a pro-Russian politician. He also arrived in Moscow in July 2024.On Monday, October 28, a rally, announced by the President of Georgia, Salome Zourabichvili, was held in Rustaveli, which was related to the "falsified" October 26 parliamentary elections by the ruling party.Georgian citizens expressed dissatisfaction with Orban's arrival in Georgia even when Levan Tsutskiridze, one of the leaders of "Strong Georgia", told the rally participants gathered on Rustaveli, that on October 28 that Hungarian Prime Minister Viktor Orban was visiting Georgia.

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Volume of loans issued by commercial banks constituted GEL 59 BLN

By the end of September 2024, the total volume of national currency-denominated loans to resident legal entities issued by commercial banks amounted to 10.03 billion GEL and foreign currency-denominated loans constituted 16.99 billion GEL.During September 2024, the volume of lending to the resident household sector increased by 1.37% or 410.52 million GEL and constituted 30.47 billion GEL by the End of September 2024.Larization ratio for total loans constituted 56.10% by the end of September 2024 and increased by 0.0002 percentage points compared to the end of August 2024.

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EU, Sweden, and FAO Empower Smallholder Women Dairy Farmers in Georgia...

FAO’s intervention through support packages aims to provide smallholder women producers of milk and dairy products with the means and opportunity to improve food safety conditions at the farm level, thus reducing any potential foodborne risks for final consumers.The ongoing EU and Sweden-funded matching grant opportunity is being offered in the Samegrelo-Zemo Svaneti region, as well as in Adigeni, Gori, Samtredia, and Tsalka municipalities. The support package is available for dairy women farmers who: Own between six and 20 cows; Have attended FAO Georgia’s food safety training sessions implemented under the EU and Sweden-funded ENPARD IV. Notably, FAO’s food safety training sessions are offered regularly in the regions and municipalities listed above. Hence, interested women dairy farmers with six to twenty cows who have not yet attended these educational meetings can do so in the coming months to become eligible to apply for such matching grant opportunities.The support package implies co-funding the following dairy production inventory: Portable milking machines; Cooling tanks with a maximum capacity of 500 L; Pasteurisers with a maximum capacity of 500 L; Portable milk analysers. “With the matching grants opportunities, we are providing smallholder women farmers with an opportunity to enhance their production efficiency, food safety, and output quality. This way, we are supporting farmers in becoming more competitive on the national and, possibly, international markets while also paving a path towards ensuring improved access to safe, high-quality, nutritious foods for final consumers. Most importantly, the food safety equipment that we deliver to dairy women farmers can support them in putting into practice the knowledge gained through FAO food safety training sessions”, says Guido Agostinucci, FAO Programme Manager. “Women lead the dairy sector in Georgia, and 102 professionals are now empowered to produce more, better, and higher quality products with improved efficiency. Notably, the equipment delivered to the ENPARD IV grantees is now in the safe hands of knowledgeable farmers ensuring their dairy products meet the food safety and quality standards. As part of the ongoing matching grant cycle, I look forward to witnessing more women farmers being provided with such investment opportunity to diversify and increase their income and to advance the Georgian dairy sector and its contribution to the rural economy.” Denis Reiss, Programme Officer for Sustainable Food Systems at the Delegation of the European Union to Georgia.“Improved access to agricultural equipment that advances production efficiency and food safety is truly a step forward for smallholder women farmers who are focused on advancing their agribusinesses. Under ENPARD IV, we are empowering a network of such women. Added to the knowledge-sharing platforms, the ongoing matching grant opportunity gives them the possibility to make dairy production processes faster and safer. This leaves more time for rural women to accomplish other goals as well while becoming more competitive on the national market,” says Elisabet Brandberg, Head of Development Cooperation/Deputy Head of Mission, Embassy of Sweden.More information about the ongoing grant opportunities for smallholder women dairy farmers is available on faogrants.ge/sp5.About the European UnionFor more than 30 years, the European Union has built a close partnership with Georgia, supporting its development through knowledge and experience sharing, expertise, innovation and financial support. The relationship between the EU and the citizens of Georgia is based on shared values of peace, freedom, democracy, human rights and inclusive economic growth. More about the EU’s support in Georgia https://eu4georgia.eu/the-european-union-in-georgia/About ENPARDThe European Union supports rural development in Georgia through its ENPARD Programme. Aiming to reduce rural poverty, ENPARD has been implemented since 2013. The Programme started by supporting the development of national agriculture potential. Subsequently, it also concentrated on creating economic opportunities for rural populations in Georgia. Since 2021, the Programme has also been working on improving food safety in the country, with additional support from Sweden and with FAO and the Czech Development Agency as the main implementers of this food safety component under ENPARD IV.Contact: Guram Saqvarelidze, FAO Communication Specialist; guram.saqvarelidze@fao.org, +995558493891

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ISFED NGO: Georgia’s Election Commission results “valid”, but vote int...

In its statement, the NGO highlighted the alignment did not endorse the validity of the election process, pointing to “severe violations observed throughout the pre-election period and on election day itself”, which it claimed had “hindered the expression of voters' free will”.The ISFED also outlined a “series of issues” that it claimed had “marred the electoral environment”, including “reports of voter intimidation, confiscation of identification cards, improper collection and processing of personal data, and extensive voter bribery”.Referring to the election day, the organisation cited incidents of “ballot stuffing, multiple voting, large-scale voter bribery, expulsion of observers from polling stations, and organised efforts to control voters' will by collecting personal data and monitoring preferences outside polling stations”.The ISFED argued the “combined violations” could have skewed the election outcome, casting doubt on whether the results accurately reflected the Georgian electorate's intent.Pointing to alleged violations, the election watchdog said it had chosen not to release the detailed data from its PVT, viewing the election environment as “fundamentally flawed”.The Georgian Dream authorities, whose party has secured more than 53 percent of the vote in the elections, has described the NGO as being “aligned with foreign interests”, pointing to its inaccurate PVT results in the 2020 general elections, which they claim had been used by the “radical wing of the domestic opposition” to “artificially spark” post-election unrest.

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Only TBC shares were traded in the green zone out of Georgian companie...

Bank of Georgia Group (BGEO LN) shares closed at GBP 39.60/share (- 3.77% w/w and +4.62% m/m). More than 487k shares traded in the range of GBP 39.40 - 41.95/share. Average daily traded volume was 60k in the last 4 weeks. The volume of BGEO shares traded was at 1.07% of its capitalization.TBC Bank Group (TBCG LN) closed the week at GBP 28.75/share (+3.42% w/w and +9.52% m/m). More than 482k shares changed hands in the range of GBP 27.70 - 29.35/share. Average daily traded volume was 60k in the last 4 weeks. The volume of TBCG shares traded was at 0.87% of its capitalization.Georgia Capital (CGEO LN) shares closed at GBP 10.36/share (-1.33% w/w and +11.28% m/m). More than 501k shares traded in the range of GBP 10.16 - 10.66/share. Average daily traded volume was 71k in the last 4 weeks. The volume of CGEO shares traded was at 1.18% of its capitalization.

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Mortgage maintains 11% growth

According to the NBG’s analytical report, as of September, it stands at 19.6%. Early in 2024, it was 20.09%, while at the beginning of 2023, it stood at 21.4%.The portfolio of mortgage loans amounts to 11.3 billion GEL, of which the balance of loans with a maturity of 5 to 10 years is up to 3 billion GEL, loans with a term of more than 10 years (01/2024 – 2.6 billion; 7.3 billion).The share of foreign currency in loans with a maturity of more than 10 years is 42%. The portfolio amounts to 3.1 billion GEL. As you know, from the fall of 2022, the maximum term of the foreign currency mortgage was shortened from 15 to 10 years. In the summer regulation of the same year, a +3% corridor was opened, both for foreign currency and GEL mortgages.The annual growth of the mortgage is 11.42%. The rate is higher than the same period of last year (+10.25%Y.Y), it will be lower than the rate of 2023 (+14.9%Y.Y).Retail lending is still growing, e.g. the share of consumer loans has increased to 19.2%. Banks less finances the direction of agriculture, because it is considered a risky segment, therefore, the share of lending to the agricultural sector is small.The volume of bad loans in the foreign currency mortgage portfolio remains up to 2%. At the same time, the share of problem loans in Euro has increased.According to the National Bank, the share of non-performing loans in Euro is within 2.4%, in USD - 1.8%, and in local currency within 1.7%.In the 11.3 billion GEL portfolio, problematic mortgages exceed 202.5 million GEL. Of this, 117 million are in GEL, equivalent to 47 million GEL in Euros, and 38.6 million GEL in USD.As of 01.09.2024, 7.3 billion GEL mortgage loans were issued in GEL; The equivalent of 2.4 billion GEL in US dollars and 1.7 billion GEL in Euro.

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“It is my pleasure to welcome you to this EU-funded event to discuss fundamental topics for any democratic society: national security and societal resilience.Security Sector Reform is a long-term political process. It goes to the heart of power relations in any country. In order to succeed, security sector reform needs to be nationally driven and based on political commitment and leadership, inter-institutional cooperation and broad stakeholder participation.Democratic oversight is equally important for a strong and resilient national security system. Accountability, transparency and openness must be applied and legal guarantees put in place to prevent arbitrary decision-making and possible abuse of the security structures.This is why a strong oversight mechanism of the Georgia’s security system has been included also as one of the nine steps attached to Georgia’s EU candidate status. Addressing and improving the parliamentary oversight of security services would be necessary for Georgia to continue on its EU accession path. [step 5 - Further improve the implementation of parliamentary oversight notably of the security services…]Despite some reforms undertaken in this regard in the past, the reports that will be presented today unfortunately reveal serious concerns. Research findings show that the parliamentary and judicial oversight of security services in Georgia are still too weak and inefficient.The hosts of today’s gathering are three civil society organisations – the Social Justice Center, CRRC Georgia and Georgian Young Lawyers’ Association. These organisations have been implementing this EU-funded security sector oversight project for the last three years.Three years marked by increasingly hostile environment for civil society oversight. Today, in this crucial moment for the future of Georgia, civil society organisations have become direct targets of disinformation and propaganda campaigns and their space has been curtailed by a combination of legal and non-legal measures. In this environment, meaningful oversight has become even harder.This is incompatible with Georgia’s aspiration to join the European Union. As HRVP Borrell said last week, these are signals of a shift towards authoritarianism, which takes Georgia away from the EU path.As the EU ambassador, my sincere hope is that the future developments will result in re-establishing of the favourable environment for meaningful reforms, including the security sector reform and building of the National Security System aligned with the European standards.The standards are respect of human rights, access to credible information and free and independent media, and undisturbed functioning of effective democratic control and oversight”, - EU Ambassador said

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Over 200,000 adult citizens of Georgia do not own a passport, an elect...

The Service Development Agency of the Ministry of Justice informed about this to the chairperson of the "National Movement" faction, Tina Bokuchava, in response to a parliamentary question.In addition, according to the document, as of September 30, a total of 882,052 citizens, both adults and minors, do not have identity documents in Georgia.According to the information provided to the MP by the agency, as of September 30, a total of 458,234 citizens have the passport of an active citizen of Georgia. Among them, 293,863 adults and 164,371 minors.As for the number of citizens holding electronic ID cards, according to official data, a total of 3,345,274 citizens have the document. Among them, 3,203,702 adults and 141,572 minor citizens.In addition, according to the document, 395 citizens have non-electronic identity certificates in the country.

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Georgian PM unveils plan for “balanced” regional development, environm...

Kobakhidze said over GEL 2 billion ($730mln) would be allocated for the development of regions through the Municipal Development Fund while a special programme focused on infrastructure development in settlements across the occupation line separating the Russian-occupied regions from the rest of the country would receive an annual allocation of GEL 20 million ($7.29mln).“Under the rural support programme, a minimum of GEL 400 million ($145.73mln) will be allocated over the next four years. At least GEL 155 million ($56.47mln) will be allocated under the Mountain Fund [...] It is crucial to ensure that the benefits are evenly distributed across the country, reaching different regions. Investments will continue to be made in this regard”, Kobakhidze said.In environmental initiatives, the Government aims to implement modern early warning systems over the next four years and increase the area of protected areas in the country by an additional 100,000 hectares, the Prime Minister said.“Also, 15,000 hectares of forest will be restored and planted. In the last four years, we have increased the pace of reforestation by about five times compared to the previous government. It is not even worth comparing; the amount of forests restored and planted by them was so insignificant in our country”, he said.Kobakhidze also highlighted reduction in air pollution in major cities such as the capital city of Tbilisi and Rustavi, saying air pollution had decreased by 25 percent and 35 percent respectively over the past few years.The Prime Minister said GEL 200 million ($72.87mln) would be allocated for the municipal transport programme over the next four years.“This funding will be used to improve the transport infrastructure and services in municipalities and regions [...] The combined budget for all 68 municipalities totalled around GEL 1.3 billion ($470mln) in 2012, mainly allocated for administrative expenses. However, the budget for 2024 in the regions alone has already reached GEL 3.34 billion ($1.22bln), with a projected figure of GEL 4.59 billion ($1.67bln) for 2028”, he said.“As for Tbilisi, the budget of the capital city was only GEL 657 million ($239.36mln) in 2012. The budget has already exceeded GEL 2 billion ($730mln) in 2024, and the forecast for 2028 is GEL 2.25 billion ($820mln). This amount does not include projects financed from the central budget. Tbilisi City Hall has significant plans for expanding the metropolitan network, rehabilitating avenues, and more. Additional resources beyond the GEL 2.25 billion will be allocated from the central budget for these projects”, Kobakhidze added.The Prime Minister also said the budget of the western city of Kutaisi had been GEL 62 million ($22.59mln) in 2012, before increasing to GEL 195 million ($71.04mln) the following year. Government projections by 2028 put it at GEL 225 million ($81.97mln), he added.Budget for the central-eastern city of Rustavi had been GEL 49 million ($17.85mln) in 2012, he said, adding the figure was expected to rise to GEL 180 million ($65.58mln) by 2025 and reach GEL 210 million ($76.51mln) by 2028. The Black Sea port city of Poti had a budget of GEL 31 million ($11.29mln) in 2012, the PM noted, before adding the number was anticipated to surpass GEL 100 million ($36.43mln) next year and reach about GEL115 million ($41.90mln) by 2028.In public services, the Government head contrasted the number of 12 Public Service Halls across the country with the opening of 109 more venues since the year, with plans to open 12 more between 2024-2025 to complete the project of their expansion.“This will ensure that [Public Service Halls] are available throughout the country, and all municipalities have the necessary infrastructure. Additionally, the Mobile [Public Service Hall] project has been implemented to provide relevant services to even remote villages. The number of services offered in the [venues] has also doubled, which is crucial for our citizens”, Kobakhidze said.He also emphasised the importance of the initiative of systematic registration of land, calling it a “crucial” project and thanking the Ministry of Justice and Minister Rati Bregadze for initiating and implementing it.“Over the recent years, one and a half billion plots of land have been surveyed under this project, and one billion plots have already been registered. Additional funding will be allocated in the coming years to register 500,000 plots to their respective owners”, Kobakhidze said.Addressing the tourism sector, the Prime Minister said the country would attract eight million visitors this year and increase the number to 11 million by 2028.“Tourism is an important sector for our country’s economy, and we take pride in being known for our hospitality. The development of tourism not only has an economic impact, but also a cultural significance for us. We can be proud of the significant growth we have achieved in this area”, Kobakhidze said.“We had 4.7 million visitors in the country in 2012. This figure is expected to reach almost eight million by 2024. The number of visitors is projected to increase to 11 million by 2028. This shows a very positive growth trend in the number of visitors”, he added.He noted income from tourism was projected to increase from $1.4 billion in 2012 to $6.4 billion by 2028, calling it an “impressive” result.“Of course, these incomes will ultimately affect incomes and social status of our population”, Kobakhidze added.The Prime Minister further presented “impressive data” regarding accommodation facilities, including hotels and guest houses.“There were 777 hotels in our country with 23,000 places in 2012. The number of hotels is projected to increase to 2,363 with 108,000 places by 2024. This represents a 4.5-fold increase in the number of places in the hotel sector. The number of hotels is expected to reach 2,680 with 142,700 places by 2028, which is nearly six times the number in 2012”, he said.Kobakhidze revealed plans to support the growth of the industry through private investments of about GEL 1 billion ($360mln) in the hotel sector, as well as allocating over GEL 1 billion for the development of tourist infrastructure, including urban renewal projects.