Georgia's fourth anti-crisis plan to cover construction sector
BAKU, Azerbaijan, May 29
By Tamilla Mammadova – Trend:
Prime Minister of Georgia Giorgi Gakharia presented fourth anti-crisis plan worth 434 million lari ($136.05 million) aimed at supporting the construction and development sector of Georgia, Trend reports citing Georgian media.
"The first anti-crisis plan supports the tourism sector of Georgia, the second aims to support agriculture, the third one covers education, and now we are presenting the fourth anti-crisis plan dedicated to the construction and development sector of Georgia, which before the pandemic accounted for 9 percent of our gross domestic product", said Gakharia.
According to the prime minister, the construction and development sector was one of the fastest growing sectors which employed 120,000 people in 2019.
Gakharia added that the anti-crisis plan will also support related businesses such as the production of construction materials, furniture manufacturing and sale of various equipment.
The plan maximally covers all social groups: people who have mortgage loans, who plan to take mortgage loans and the internally displaced persons (IDPs)," said the prime minister.
As he noted, the main challenges the construction and development sector faces and the anti-crisis plan aims to overcome are declining sales of residential apartments, possible fluctuations in prices of residential apartments, increased risk of incomplete constructions and decreased access to finances for development companies.
"The state will subsidize 4 percent of the interest rate of the mortgage loan for 5 years," Gakharia said adding that the subsidy will be issued for loans not exceeding 200,000 lari ($62,695) and will only apply to those who will take mortgage loans to purchase newly built residential apartments from June 1, 2020 to January 1, 2021.
The state will issue a loan guarantee to the amount of 20 percent of the loan. The guarantee will last five years starting from the loan issuance date and will apply to loans where the participation is at least 10 percent.
"The state will spend 150 million lari [$47.02 million] to buy about 1,800 apartments under construction from May 1, 2020 to January 1, 2021. The purchase will be made through an auction, where the price should not exceed 1,700 lari [$532.92] per 1 square meter," the prime minister said.
The total budget of the fourth anti-crisis plan is to be divided the following way: 70 million lari ($21.9 million) - subsidy of interest rate on mortgage loans by the state, 14 million lari ($4.3 million) - a state guarantee on a mortgage loan portfolio, 150 million lari ($47.02 million) - purchase of residential apartments for the IDPs, and 200 million lari ($62.6 million) - a state guarantee for the completion of a residential real estate project.
Gakharia said that the spread of the coronavirus is under control in Georgia, it is the time to strengthen the national economy.
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