The strengthening of the lari and the stability of the exchange rate should lead to a gradual restoration of confidence in the national currency, businessmen believe

TBILISI, June 5 – Sputnik. Despite the strengthening of the lari against the dollar, the Georgian national currency is still too devalued and there is a resource for its further strengthening, according to the Business Association of Georgia (BAG).

After a long decline since the beginning of the year, the lari’s exchange rate against the dollar began to strengthen in May, and to date, the exchange rate of the national currency has grown by 10.8%. The exchange rate of the lari against the US dollar as of June 5 is 3.0791 GEL / $ 1.

The BAG welcomes the strengthening of the national currency, which has been observed recently.

“As we have repeatedly stated, in reality, our country’s lari exchange rate is the main barometer of the state of the economy, and its strengthening instantly leads to a significant improvement in the mood and expectations of the population, increasing interest in business activity from both local and foreign investors, and much more. “, – they think in the BAH.

The statement says that the process of strengthening the lari will help to further improve macroeconomic indicators, including curbing the growth of inflation, which has become a rather serious problem in recent years. In addition, the strengthening of the lari and the stability of the exchange rate should lead to a gradual restoration of confidence in the national currency.

“This will create a strong impetus for business and the economy, make fiscal, monetary and exchange rate policies more effective,” the BAG believes.

The Georgian government revised its forecast for the country’s economic growth in 2021 from 4.3% to 6.5%. The Ministry of Finance is considering three scenarios for the development of events. According to the optimistic scenario, a faster growth of tourism is predicted – more specifically, at the level of 40-45% from 2019. Dynamic economic growth is expected in other sectors of the economy.

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The share of tourism in the Georgian economy before COVID-19 was about 10%. Therefore, its recovery is extremely important for the revival of business activity in the country.

The coronavirus pandemic has wreaked havoc on local businesses. The Georgian economy continues to experience the dire consequences of COVID-19, which has affected absolutely all areas. The pace of economic decline accelerated during the second wave of coronavirus, leading to a 6.2% decline in GDP in 2020.

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