According to the assessment of capital market expert Marina Guledani, if the processes in the country do not stabilize, the country's credit rating might also be reduced after the deterioration of the outlook for Georgia's sovereign rating.
The fact is that the credit rating agency Moody's left Georgia's sovereign rating at Ba2, but lowered its outlook from "stable" to "negative."
As Marina Guledani told BMG, the main reason why rating agencies have not lowered the rating so far is the high economic growth in Georgia.
"We had high economic growth in the past period, and this is the main reason why the country's rating has been maintained so far. But precisely because of these institutional and governance problems, if this continues, it is possible that the rating itself will be reduced,” said Marina Guledani.
The capital market expert also states that in general, a deterioration in a country's rating or its outlook means more expensive financial resources for economic agents.
“A deterioration in the outlook means that it will become more expensive for the country and economic agents to raise financial resources in the future, because the credit agency believes that the outlook is negative. The credit rating generally determines the price of money for the country and economic agents in the country, the price of money is determined by the risk profile. Any downgrade of the rating and outlook implies more expensive money, both for the government and for any economic agent, especially from international markets,” said Marina Guledan.
