National currency instability hinders the development of business

National currency instability hinders the development of business

access_time2021-09-24 14:00:04

According to the study conducted by the Business Association of Georgia,  in the third quarter of 2021, most entrepreneurs consider the instability of the national currency as  the biggest problem that hinders business development.

At the same time, 55% are confident that the lari will keep falling. Amid a post-pandemic economic recovery, sales growth and an improvement in the labor market, business does not expect the national currency to gain its value  despite the tightening of the National Bank's monetary policy, an increase in foreign exchange earnings, a decrease in the interest rate on the deposits in dollars to a historic low, and other factors that should have boosted the national currency’s strengthening. 

The Association members name legal and bureaucratic barriers among the problems hindering business development. At the same time, compared with the previous quarter, this indicator decreased due to the removal of most COVID-related restrictions. The number of businessmen who consider bureaucratic barriers to be the main obstacle has halved.

A  decline in demand, which peaked at the end of 2020, is another pandemic-related consequence.

In 2021, this factor is gradually softening amid the recovery of the tourism sector and the opening of other sectors of the economy. But still 34% of the surveyed businessmen are concerned about  a decline in the purchasing power of the population.

The labor shortage problem has become even more acute after the pandemic and also hinders the country’s development.

A number of companies that consider labor shortages as one of the serious problems facing by them has increased since the second quarter of 2021.


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