Deputy Managing Director of the IMF: Georgia’s economy has been resilient in the face of negative shocks
BM.GE
18.12.19 11:26
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On December 17, the Executive Board of the International Monetary Fund (IMF) completed the Fifth Review of Georgia’s economic reform program supported by a three-year extended arrangement under the Extended Fund Facility (EFF). The completion of the review will release SDR 30 million (about $41.4 million), bringing total disbursements under the arrangement to SDR 180 million (about $248.7 million).
In completing the review, the Executive Board also approved the authorities’ request for waivers of nonobservance for the performance criteria on the ceilings on the augmented general government deficit and ceiling on the cash deficit of the Partnership Fund.
The Executive Board has also approved the extension of the arrangement by one year until April 11, 2021 and rephase access accordingly. The extended arrangement for SDR 210.4 million (100 percent of quota) was approved by the Executive Board on April 12, 2017.
“Georgia’s economy has been resilient in the face of negative shocks, with solid growth and a lower current account deficit. However, the balance of risks is on the downside as domestic and international uncertainties could weigh on investment, reducing medium-term prospects.The recent high headline inflation rate reflects both temporary factors and the impact of the lari’s depreciation. The National Bank of Georgia (NBG) has appropriately tightened monetary policy to address inflationary pressures. Exchange rate flexibility remains vital as a shock absorber for the Georgian economy, and foreign exchange interventions should be limited to addressing excessive volatility or building reserves,” Mr. Tao Zhang, Deputy Managing Director and Acting Chair, said.
The IMF has released a revised indicator of Georgia's economic growth. The fund predicted 4.3% growth in the country by 2020. The rate is down by 0.5 percentage points from the growth rate released in October 2019.
