03.Dec .2020 13:30

Audit Service: If lari Depreciates by 30%, Government Debt Will Reach 72% of GDP

Audit Service: If lari Depreciates by 30%, Government Debt Will Reach 72% of GDP
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In the event of another shock to GEL exchange rate, there is a high probability that the public debt ratio will suddenly rise to 72% of GDP, if lari Depreciates by 30%.

According to the report of the State Audit Office of Georgia, the government of Georgia increases debt by 3.6 billion GEL in 2021. As of the draft budget 2021, it is planned to borrow 5.27 billion GEL in foreign debt next year. Consequently, in the event of another shock to GEL exchange rate, there is a high probability that the public debt ratio will suddenly rise to 72% of GDP.

Audit Service also published a report on the 8-month performance of the 2020 budget. The document reads, that the remains of the state debt increased by 1.84 billion GEL.

During 2020, the national currency depreciated by 13.6% against the USD, while by 19% against EUR. However, most of Georgia's foreign loans are nominated in these two currencies.