Numbers & Statistics

IMF Executive Board Completes the Fourth Review of the Extended Arrangement under the Extended Fund Facility for Georgia

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Via IMF (Den Internationale Valutafond)

IMF Executive Board Completes the Fourth Review of the Extended Arrangement under the Extended Fund Facility for Georgia







June 19, 2019











  • Georgia’s economic performance remains robust with resilient growth, inflation under control, and reduced external vulnerabilities.
  • Continued implementation of the authorities’ reform agenda remains vital to ensure that growth is sustainable and inclusive.
  • A comprehensive education reform needs to boost education quality and reduce skills mismatches in the labor force.

On June 19, the Executive Board of the International Monetary Fund (IMF)
completed the Fourth 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
150 million (about $207.2 million).The extended arrangement for SDR 210.4
million (100 percent of quota) was approved by the Executive Board on April
12, 2017 (see

Press Release No. 17/130
).

Following the Executive Board discussion, Mr. David Lipton, First Deputy
Managing Director and Acting Chair, said:

“Georgia’s economic performance remains robust with resilient growth,
inflation under control, and reduced external vulnerabilities.
Although the outlook is favorable, the authorities need to be prepared to
address any negative spillovers from external developments and persevere
with structural reforms to promote higher and more inclusive growth.

“The fiscal deficit is projected to remain relatively stable in 2019 and
over the medium term reflecting the authorities’ commitment to fiscal
sustainability. Higher spending on public education will be offset with
slower growth in infrastructure investment. Regarding education spending,
salary increases can only be effective if accompanied by other steps to
boost education quality, which requires further work on a comprehensive
education reform.

“Monetary policy is rightly focused on price stability. As recent increases
in inflation are driven by temporary factors, a neutral monetary policy
stance remains appropriate. Tighter lending standards have slowed credit
growth as expected, making credit growth more sustainable. The
inflation‑targeting framework, combined with exchange rate flexibility, and
interventions that help build reserves continue to serve Georgia well.

“Continued implementation of the authorities’ reform agenda remains
vital to ensure that growth is sustainable and inclusive. The authorities are advancing education reform to reduce skills
mismatches in the labor force.
A new insolvency law, together with making the pension agency fully
operational and reforms to promote a transparent and independent
judiciary, would help mobilize investment.
The authorities’ energy market reforms could improve market competition and
energy efficiency.

“Sound policies and further reforms under the IMF program will help
preserve the gains made, strengthen economic resilience, and foster
stronger and more inclusive growth.”

Georgia: Selected Economic and Financial Indicators,
2016-2020

2016


2017


2018


2019


2019


2020


Actual


CR 18/373 1/


Projections

National accounts and prices

(annual percentage change; unless otherwise
indicated)

Real GDP

2.8

4.8

4.7

4.6

4.6

4.8

Nominal GDP (in billion of laris)

34.0

37.8

41.1

45.0

44.5

48.1

Nominal GDP (in billion of U.S. dollars)

14.4

15.1

16.2

17.2

16.6

18.1

GDP per capita (in thousand of U.S.
dollars)

3.9

4.0

4.3

4.6

4.5

4.9

GDP deflator, period average

4.2

6.1

3.7

3.4

3.5

3.3

CPI, Period average

2.1

6.0

2.6

3.1

3.8

3.2

CPI, End-of-period

1.8

6.7

1.5

3.0

4.5

3.0

Investment and saving

(in percent of GDP)

Gross national saving

19.6

23.6

25.7

25.4

25.6

26.4

Investment

32.7

32.4

33.4

34.9

33.1

33.8

Public

5.0

6.1

7.0

7.1

7.2

6.9

Private

27.7

26.3

26.4

27.9

25.9

26.8

Consolidated government operations

(in percent of GDP)

Revenue and grants

28.3

29.2

28.6

28.0

28.4

28.1

o.w. Tax revenue

25.7

26.2

25.4

25.1

25.4

25.2

Expenditures

32.5

32.8

31.7

30.9

31.4

31.1

Current expenditures

26.0

24.3

23.1

23.1

23.4

23.5

Capital spending and budget lending

6.5

8.5

8.6

7.8

8.0

7.6

Net Lending/Borrowing (GFSM 2001)

-1.5

-0.5

-0.9

-1.9

-1.9

-2.0

Augmented Net lending / borrowing (Program
definition) 2/

-2.9

-2.9

-2.5

-2.6

-2.6

-2.7

Public debt

44.4

45.1

44.9

43.5

46.7

48.3

o.w. NBG debt to the IMF

0.6

0.5

1.0

1.0

1.1

o.w. Foreign-currency denominated

35.1

35.7

35.3

33.8

35.6

35.0

Money and credit

(in percent; unless otherwise indicated)

Credit to the private sector (annual
percentage change)

19.6

17.6

19.3

12.6

12.3

10.8

In constant exchange rate

11.8

19.1

17.1

13.1

11.9

11.5

Broad money (annual percentage change)

20.4

14.8

14.0

12.2

12.8

12.9

Broad money (incl. fx deposits, annual
percentage change)

19.1

13.7

13.3

10.8

11.8

10.8

In constant exchange rate

13.4

16.3

12.1

12.8

12.4

13.6

Deposit dollarization (in percent of total)

69.9

63.7

62.1

59.6

60.6

59.6

Credit dollarization (in percent of total)

64.6

56.1

55.8

51.3

53.7

51.3

Credit to GDP

54.9

58.1

63.8

64.6

66.2

67.8

External sector

(in percent of GDP; unless otherwise
indicated)

Current account balance

-13.1

-8.8

-7.7

-9.5

-7.5

-7.3

Trade balance

-26.9

-25.2

-25.3

-27.4

-25.2

-24.9

Terms of trade (percent change)

-1.4

-2.6

-4.9

-0.9

1.2

-1.3

Gross international reserves (in billions
of US$)

2.8

3.0

3.3

3.5

3.7

4.1

In percent of IMF Composite measure
(floating)

0.0

88.9

90.8

95.6

100.1

105.2

Gross external debt

109.9

113.7

112.9

113.3

117.0

116.4

Gross external debt, excl. intercompany
loans

92.0

96.3

94.6

95.0

97.8

97.4

Laris per U.S. dollar (period average)

2.37

2.51

Laris per euro (period average)

2.62

2.83

REER (period average; CPI based, 2010=100)

100.5

100.6

Sources: Georgian authorities; and Fund
staff estimates.

1/ Please refer to this link for details:
https://www.imf.org/en/Publications/CR/Issues/2018/12/19/Georgia-Third-Review-Under-the-Extended-Fund-Facility-Arrangement-Press-Release-Staff-Report-46484
.

2/ Augmented Net lending / borrowing.

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Randa Elnagar

Phone: +1 202 623-7100Email: MEDIA@IMF.org






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