IMF approves $58m disbursement for Georgia

IMF: Despite a challenging external environment, macroeconomic developments in 2014 continue to be in line with the program. Photo by N.Alavidze, 25 Dec 2014 - 12:24, Tbilisi,Georgia

The International Monetary Fund (IMF) approved $58.1 million USD assistance package to Georgia with bringing total disbursements.

In July, the Executive Board of the IMF approved a 36-month $154 million USD Stand-By Arrangement (SBA) with Georgia to support the country’s economic program.

The Board’s decision was made today after completed the first review of Georgia’s economic performance under the three-year Stand-By Arrangement.

IMF’s Executive Board said that despite a challenging external environment, macroeconomic developments in 2014, Georgia continue to be in line with the program.

However, they highlighted those factors that enabled them to approve the finance.

"Growth of 5 percent is expected, helped by strong domestic demand and the fiscal expansion. Inflation has gradually increased but remains below the target of 6 percent for 2014. The current account deficit has widened to 8.5 percent of GDP as expected with this year’s economic recovery. Although fiscal policy remains supportive to growth, the fiscal deficit is expected to come in lower than the 3.7 percent of GDP projected in the program,” read the press release of IMF.

However, IMF officials focused that the study of possible obstacles to access to finance was not completed by September as expected under the program.

"It will instead be completed in 2015, to allow more time to incorporate inputs from key development partners and to make a deeper assessment,” it said.

IMF was confident that although there was downside risks including the recent fall in oil prices which could boost growth and reduce the current account deficit.