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Georgia eyes 5 pct growth with 2014 budget

Source: Reuters - Wed, 11 Dec 2013 07:46 PM
Author: Reuters
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TBILISI, Dec 11 (Reuters) - The Georgian government said on Wednesday it expected the economy to grow by 5 percent next year, rebounding from an economic slowdown in 2013.

Parliament on Wednesday approved a 2014 budget which sees revenues of 7.422 billion lari ($4.4 billion), down from 8.749 billion lari expected this year, and spending of 7.248 billion lari, down from 7.255 billion lari expected in 2013.

The government plans to raise 600 million lari next year through issuing securities to cover budgetary expenses and to repay part of the state debt.

Finance minister Nodar Khaduri said 200 million lari raised through issuing securities would be placed as a deposit in commercial banks to make it available for long-term loans in the national currency.

"We expect economic growth to be 5 percent next year," Khaduri said.

The Georgian economy grew by 1.5 percent in the second quarter of 2013. The government and the International Monetary Fund (IMF) cut their economic growth forecasts to 2.5 percent this year from an initial 6 percent.

The IMF resident representative Azim Sadikov told Reuters last month Georgia's economic growth rate should double next year as long as the government acts to shore up investor confidence and does a better job of explaining policy.

Former Prime Minister Bidzina Ivanishvili and former President Mikheil Saakashvili have traded accusations of corruption and misrule in a feud that has hurt Georgia's reputation as one of the region's more business-friendly states.

Ivanishvili, a billionaire who became prime minister after leading an opposition coalition to victory over Saakashvili's party in an October 2012 parliamentary election, stepped down after protege Georgy Margvelashvili became president last month.

The government hopes that its plans to deepen ties with the European Union will stimulate investment and help economic growth in the Caucasus nation of 4.5 million.

Georgia initialled an agreement with the EU at a summit in Vilnius on Nov. 29 and intends to sign a deal by September 2014.

Russia reopened its market for Georgian wine, mineral water and fruit this year after imposing bans in 2006, although Georgian-Russian tensions still run high five years after the war over two Moscow-backed breakaway regions of Georgia.

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