BAKU, Azerbaijan, November 10
By Tamilla Mammadova – Trend:
Georgian government prepared a comprehensive package of measures to support the economy, Trend reports via the European Bank for Reconstruction and Development (EBRD) report.
"The measures first adopted in March and then extended in May 2020 include increased health sector funding, postponement of certain tax payments, doubling of value-added tax refunds by the end of 2020, a scaling up of the credit guarantee scheme and the state programme ‘Produce in Georgia’, and exemption from income tax for low-paid jobs," said the report.
"Social assistance measures include coverage of utility fees for smaller household users, deferred loan repayments for household loans and support for those affected by the pandemic, the self-employed and vulnerable groups. The National Bank of Georgia (NBG) lowered capital and liquidity requirements, relaxed regulatory requirements to support loan restructuring and loosened monetary policy in light of lower inflationary pressures," the report said.
As reported, a number of key energy laws and regulations were adopted. The Law on Energy and Water Supply outlines the overarching energy sector reform while the Renewable Energy Law sets renewable energy targets. Both were adopted at the end of 2019 and define the general framework for the upcoming markets, set deadlines and determine the government bodies responsible for their implementation.
"Secondary legislation setting out the details of the new market organisation and implementation action plans is being developed," said the report.
"Following the adoption of the National Energy Efficiency Action Plan, also at the end of 2019, the authorities adopted the Law on Energy Efficiency and the Law on Energy Performance of Buildings in May 2020. The regulation will help improve the energy performance standards for new constructions and building retrofits, in line with European Union (EU) standards. All these laws are important milestones in meeting requirements under the EU-Georgian Association Agreement as well as Georgia’s membership of the Energy Community," EBRD said.
"The NBG has strengthened its regulatory power. In a series of moves in the past year the NBG amended regulations on consumer lending to give more discretionary power to the banks and enhanced its transparency and communication. The framework for the recovery of banks and resolution, approved in December 2019, strengthens Georgia’s financial resilience. The resolution framework is an alternative to bank liquidation, to be used in cases where liquidation would lead to significant risks to financial system stability," said the report.
"The framework will become effective by the end of 2020. The regulation on consumer lending, adopted at the end of 2018, was adjusted with the aim to move from a rules-based to a principle-based approach, giving banks more freedom to manage risks. The amendments include deregulating the way the borrower’s income is determined while keeping the obligation of income verification, introducing risk management requirements for consumer lending in banks and microfinance institutions, reducing the number of income brackets for payment-to-income limits, and increasing the maturity for mortgages in local currency," the report said.
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