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Georgia struggles amid Russia fall-out

Tuesday, April 14, 2015 - 01:34

Residents and businesses in the former Soviet republic of Georgia feel the squeeze from an economy battered by a fall in the Russian rouble and the conflict in Ukraine. Hayley Platt reports.

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Tblitsi, Georgia, a metropolis of half finished buildings. Evidence of an economy in decline. Falling oil prices and western sanctions, which have wreaked havoc on Russia's economy are spilling over to Georgia. Its currency, the lari, has lost more than a fifth of its value since the beginning of November. It's hurting local business, says shop owner Alexander. (SOUNDBITE) (Georgian) JEANS SHOP OWNER, ALEXANDER, SAYING: "The number of customers has almost halved, if not more. I used to sell ten pairs of jeans a day, while now I'm selling only five." In January consumer prices rose 1.4 percent year-on-year after a 2.0 percent rise in December. The government is targetting inflation between 5 and 6 percent for 2015. One former Georgian central bank governor says the economic crisis will continue as long as the currency remains unstable. (SOUNDBITE) (Georgian) FORMER HEAD OF GEORGIAN CENTRAL BANK, ROMAN GOTSIRIDZE, SAYING: "The economic situation is difficult as the lari is still unstable, there are still fluctuations, situation is unclear and the currency market is nervous. It is difficult to calm down the businesses and attract investors before the lari finds its new equilibrium." He blames Georgia's current leadership for strengthening the state's control over the economy, which he says has affected growth. And he's not alone. Tens of thousands of protesters took to the streets of the capital last month, calling on the government to resign.

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Georgia struggles amid Russia fall-out

Tuesday, April 14, 2015 - 01:34