On November 4th, President of ISET Eric Livny and the Team Leader of the German Economic Team (GET) Ricardo Giucci held a joint session for stakeholders on their most recent study: Depreciation of Lari: “Necessary and Effective”, that GET produced in cooperation with ISET-PI. Mr. Eric Livny started with a short introduction about the partnership between the ISET-PI and GET that has been going on for over a year in subjects such as: exchange rate, industrial, energy, resource extraction policies, etc. Afterward, Mr. Giucci presented the study to the stakeholders.

The study includes some of the major reasons behind Lari Depreciation starting from autumn 2014: such as linkages of Georgia to its neighboring countries, global appreciation of the US dollar, increasing trade deficit by USD 500 mil, higher demand for USD. Afterward, Mr. Giucci reviewed National Bank policies undertaken in this period and evaluated them as effective to regain stability in the economy.

As GET representatives emphasized, the main problem is dollarization, not depreciation that is a structural problem for the Georgian economy. Mr. Giucci also noted that in case of more active interventions on the market National Bank of Georgia would have risked a recession and a job loss around the country. GET representatives also reviewed some case studies of ineffective policies taken throughout the region in this period.

The German Economic Team Georgia (GET Georgia) advises the Georgian government and other Georgian state authorities, such as the National Bank, on a wide range of economic policy issues. Their analytical work is presented and discussed during regular meetings with high-level decision-makers. GET Georgia is financed by the German Federal Ministry for Economic Affairs and Energy. GET publications are freely accessible on their website (www.get-georgia.de).