Fitch revises Georgia’s outlook from stable to positive

The Study offered 43 specific recommendations to how to develop Georgia's capital market. Photo by N. Alavidze/, 19 Mar 2018 - 15:48, Tbilisi,Georgia

Global rating agency Fitch Ratings has revised the outlook on Georgia’s sovereign credit rating from stable to positive, announced Georgia’s Ministry of Economy today.

The revision of the outlook to positive reflects the key rating drivers such as maintaining a stable macroeconomic environment, showing resistance to shocks and ensuring a favorable business environment", said the ministry.
Georgia’s growth prospects compare favourably with the ‘BB’ rated peer group, where median five-year average growth is estimated to be 3.5 percent. Under Fitch’s latest projections Georgia is set to achieve real GDP growth of 4.6 percent in 2018 and 4.9 percent in 2019", read the statement of the Ministry of Economy.
The composition of growth is expected to be broad-based, supported by a favourable external environment supporting growth in exports and remittances, as well as higher domestic demand driven by an increasing government drive towards higher capital spending", read the statement.

Fitch’s projections for the budget deficit and growth performance are consistent with a gradual decline in government debt. Fitch sees a stabilisation in the government debt ratio, estimated at 44.5 percent of GDP in 2017, which is just below the median debt ratio (47.4 percent) of ‘BB’ category peers, and forecast by the agency to gradually decline towards 43.4 percent of GDP by 2019.

Georgia’s government debt structure has a high level of concessional and multilateral debt (84 percent of total debt), but 76 percent is foreign currency-denominated, exposing it to exchange rate volatility. For 2018-2019, Fitch estimates upcoming government debt maturities averaging 4.7 percent of GDP and interest payments equivalent to three percent of revenues.