National Bank Governor Koba Gvenetadze says the real estate subsidy program has played a key role in saving the sector, although it has not been a lifeline for banks in a crisis year.
In response to a question from BMG, Gvenetadze said that the main part of banks' income is because of the existing portfolio, and the program has not had a material impact in this regard.
"I think the program has played an important role in mitigating the negative impact of the shock on the real estate market. When discussing this issue, the government took into account what happened in 2008, when there was a boom in the real estate market, and because there was no help for this sector then, it found itself in a rather difficult situation. There was a huge price adjustment, which poses a serious problem for the financial sector as well. There are always questions about whether the prices should not be adjusted at all. Yes, to some extent, and there are some adjustments on the market, but given that the economy will grow next year, a big drop must not happen," - he said.
