Investors Returning To Georgia

GENEVA -- Foreign investment has begun to trickle back into Georgia as the economy shrugs off the impact of last month's war with Russia, Georgian Prime Minister Lado Gurgenidze said Thursday.

Gurgenidze said it was too early to give a precise forecast for foreign direct investment this year, although it was clear that inflows would be well below last year's levels.

The figure would probably be within a $100 million to $300 million range from now to the end of the year, after $1 billion in the first half and $2 billion in the whole of 2007, he said.

Foreign direct investment now accounts for 60 percent of the country's $13 billion economy, the sixth-highest level in Europe, he said.

Earlier, Gurgenidze told a conference in Geneva on Russian hedge funds that the war had not hit the economy hard so far.

"We've gone through some fairly difficult days, but basically it's business as usual. Certainly it's business as usual in banking," he said.

Georgia was continuing to export electricity and had fixed damaged infrastructure, and the port of Poti was seeing normal cargo volumes while all scheduled flights were also operating.

But the conflict would dent economic growth, which has been running at 10 to 12 percent for the past three years, he said. "This conflict will cost us a few percentage points of GDP growth," Gurgenidze said.