The year 2017 was very
important for the Georgian capital market and was characterized by a
large amount of corporate bonds issue worth 220 million. If securities by international
organizations are added to this figure, the amount will increase to 330
The revitalization of the capital market in 2017 was
mainly due to economic growth and
The capital market is directly dependent on the development of the economy, and one of the
incentives for the growth of the bond issue was that Georgia managed more or
less to overcome external shocks and demonstrate stable growth.
In particular, in 2015-2016 the economy of the
CIS countries decreased 0, 9% while in Georgia it grew by 3%. It is also expected that in 2017
the growth will be 5% with an inflation rate of 6%.
In the medium
term, Georgia’s economy is expected to grow 6-7%, inflation rate will be 3-4%, unemployment - 10-11%.
As for the bond market,
it was promoted by the growth in demand for loans. In the first half of 2017,
the corporate loan portfolio amounted to GEL 17.7 billion, which is 13, 4% more
than in 2016. The main source of the loans were banks, international investment
funds and corporate bonds.
The government also encourages the capital market growth - in 2018 it is planned to consider amendments to the tax legislation, which provide for the exemption of interest on bonds from taxation – all this will increase the interest of business in issuing securities. It is the capital market that can become an alternative means of placing savings of the population along with bank deposits.
It is also planned to enact the
accumulative pension system in 2018, which is a direct incentive for the
development of the corporate bond market - it it’s expected that 80% of the
funds received by the pension fund will be invested in the local securities