MINISTRY OF ECONOMY
AND SUSTAINABLE DEVELOPMENT
OF GEORGIA

First Vice Prime Minister, Minister of Economy and Sustainable Development delivered a speech at the Capital Markets International Conference. Levan Davitashvili spoke about the importance of the capital market for the economy the country, the main aspects of its development, the role of the state in this process and the ongoing and upcoming reforms.

“By becoming EU Candidate country and positioning ourselves as middle corridor, Georgia has ambition to become a regional hub place for financial services. We see that growing middle class and wealth generation in our region can mobilize more long-term capital,” – Levan Davitashvili stated.

In his speech, the Minister of Economy and Sustainable Development assessed the current macroeconomic situation and main trends of the country. As Davitashvili noted, during the recent years, Government of Georgia has shown its commitment towards the structural reforms and along with roader economic policies the country has shown strong resilience during the Covid-pandemic and geopolitical crises in the region. At the same time, there has been a double digit GDP growth recorded during the last years, the inflation has been quickly stabilized after the pandemic through correct monetary policies and the unemployment rate has been at its lowest.

As for the macroeconomic trends necessary for the development of the capital market, according to Levan Davitashvili, all the parameters exist for the capital market to become active, and the government implements appropriate policies to support this process. “Two big macroeconomic trends are as well unfolding, which require capital market development. Georgian economy has been undergoing a significant structural transformation, on the one hand there is the long-term domestic money capital accumulation trend driven by pension and insurance reforms and on the other hand an increasing demand for long-term capital driven by our development policies. To connect these two ongoing trends, it becomes vital to develop efficient long term capital allocation mechanisms. And that’s what the Government of Georgia has been fully committed to do” – the Minister stated.

Representatives and experts of public and private, including the international investment banking sector, financial and donor organizations participate in the international capital markets conference organized by the TBC Capital. At the conference, current issues and trends of the capital markets, as well as the prospects of its development in the country in line with regional and global terms will be discussed. According to Levan Davitashvili, the event is timely and important since the Georgian Government is actively working towards the development of the capital market, and this is one of the most active directions of the government's structural reforms.

“For the last 5 years we have been mostly improving our legislative frameworks to enable various capital market instruments, infrastructure and to support our investor base diversification. Just to mention few achievements - we have introduced new Investment Funds Law and Compulsory Pensions law. Besides this we have adopted frameworks for securitization and covered bonds. For further productivity growth and capital formation we see that we need a more diversified financial sector, one that can provide more easily equity capital and do alternative investments. For that we believe that even though our banks have their lion’s share in lending to our economy, we need other alternative instruments on our markets to drive this growth. Starting from this year through our agencies we will be deploying different instruments on the capital market to support both securities issuances and investment funds growth” – the First Vice Prime Minister highlighted.