Moody’s Investors Service changed its outlook on Georgia's 'Ba2' credit rating to 'negative' from 'stable'.
The agency said the decision reflects the heightened geopolitical event risks from Russia's ongoing military invasion of Ukraine given Georgia's ongoing, albeit 'frozen', tensions with Russia over South Ossetia and Abkhazia, the unpredictability of Russia's strategic intentions in the region and Georgia's border with Russia.
The affirmation of the ratings is underpinned by the solid fundamentals of Georgia's fiscal and monetary institutions which are likely to allow the continuation of an effective macroeconomic policy response to any further Covid disruptions and to offset the negative economic impacts of slowing regional growth due to the ongoing conflict.
Moody's expects 3.8% economic growth in Georgia this year, which is twice less than the 7.3% growth forecast made by the organization before the war.
In addition, the credit agency estimates that economic growth in Georgia will average 4-5% in the coming years.
