Galt & Taggart economist Lasha Kavtaradze says that, against the backdrop of growing foreign exchange reserves and a record-low current account deficit, international credit rating agencies may upgrade Georgia’s sovereign rating.
“International reserves reached a record high in December, amounting to $6.2 billion. Compared to the previous month, reserves increased by $343 million. This change is largely driven by purchases carried out through the Bmatch platform, although we won’t have official information on this until January 26.
However, what is already clear is that changes in gold prices contributed an additional $41 million to the reserves. Reserve movements are also linked to other foreign currency, banking, and government operations.
The fact that reserves have grown to a record level indicates that their volume is now essentially at an adequate level. International investment organizations closely monitor this indicator, as it plays a significant role in credit rating improvements.
There is another important indicator, the current account balance, which in 2025 is expected to reach a record-low deficit. Our projection is that the deficit will be around 3.2%.
Considering these two indicators together, the probability of a credit rating upgrade is increasing. However, there are other nuances as well, which rating agencies will take into account,” Kavtaradze said on the “Business Morning” program.
