The Executive Board of the International Monetary Fund (IMF) approved a US$280 million (100% of quota and SDR 210.4 million) StandBy Arrangement for Georgia which provides support for the authorities’ economic policies over the next three years. The Board’s decision makes about US$40 million (SDR 30 million or 14.3 percent of Georgia’s quota) immediately available. The Georgian authorities intend to treat the new arrangement as precautionary.
The new, three-year program is accompanied by articles of a memorandum signed by the Government of Georgia and the National Bank. This memorandum defines the conditions that the Government of Georgia will implement over the next three years. Among them are the reduction of the external debt ratio to 45% of GDP in 2022 and the reduction of the budget deficit to 3% by 2023.
The articles of the memorandum also speak about increasing the social security of vulnerable families, for which the government will adjust the 2022 budget. According to the document, the government will adopt a new program, the budget of which will be 0.2% of the country's GDP, and which will increase the benefits to the beneficiary families, it also says that it will distribute state fertilizer vouchers to farmers. The budget of these programs will be about GEL 130 million.
"To protect the vulnerable and low-income population from the sharp rise in world commodity prices, we will make budget adjustments to help targeted social assistance families with young children. We will also distribute one-time fertilizer vouchers for rural farmers who bring their own crops. Both measures will be 0.2% of GDP by 2022, ”reads a memorandum signed by Georgia's finance and economy ministers, as well as the president of the National Bank.
The articles of the memorandum also mention the continuation of the reform of state-owned enterprises and the adoption of a replacement model for the PPA mechanism in energy, which should ensure sustainable investments in this sector.
