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Georgia struggles with tumbling lari

Wednesday, February 10, 2016 - 01:38

The former Soviet Republic of Georgia is struggling with an economic crisis triggered by a weakening of its national currency - the lari. As David Pollard reports, small businesses have been badly hit.

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BROADCAST AND DIGITAL RESTRICTIONS~** Broadcasters: NONE Digital: NONE** Toys and games are the core business of Ivane Chkonia's Grand Company. Most are imports - becoming harder and harder to pay for amid a tumble in Georgia's local currency, the lari. Keeping his business going: not child's play, he says. (SOUNDBITE) (Georgian) FOUNDER OF GRAND COMPANY IVANE CHKONIA, SAYING: "We're 100 percent dependent on dollars and euro, so we're working in a difficult environment. We've had to raise prices by approximately 15-20 percent and that's impacted consumers' ability to buy.'' Another victim: small traders operating in local shops. Many pay their rents in dollars - but with the lari at a record low against the greenback - that can be a stretch too far. Forcing some out of business. Losing 40 per cent of its value since November 2014, the lari is part of a wider malaise - Georgia's economy badly hit by a fall in the rouble - Russia is its major trading partner. A decline in exports has added pressure. Economic expert, Giga Bedineishvili. (SOUNDBITE) (English) ECONOMIC EXPERT, GIGA BEDINEISHVILI, SAYING: "Overall business environment is not that positive .... The current government has been trying to maybe help the local production, but this is the classical case when intentions seem to be good, but the way they are carried out and executed don't really yield any result." Rising prices, meanwhile, are increasingly forcing consumers to hunt for bargains in local street markets. Inflation was at just under 5 per cent last year - in the early stages of 2016, that rate is already going up.

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Georgia struggles with tumbling lari

Wednesday, February 10, 2016 - 01:38