IMF approves $200 mln for Georgia to address economic impact of coronavirus
Tao Zhang, IMF Deputy Managing Director and Chair stated that the coronavirus pandemic “has hit the Georgian economy hard”.Photo: Nino Alavidze/Agenda.ge
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The Executive Board of the International Monetary Fund (IMF) has approved $200 million for Georgia to help address the effects of the coronavirus.
This, IMF said, will help Georgia “meet urgent balance of payments and fiscal needs” stemming from the COVID-19 pandemic, including “increased spending on health services and social protection”.
The IMF Executive Board approved US$200 million financing to #Georgia to address the effects of the #COVID19 pandemic. The Board also completed the 6th review for Georgia's economic program. https://t.co/uGzINNNbmO pic.twitter.com/IQ8i2iRFS1
— IMF (@IMFNews) May 1, 2020
Tao Zhang, IMF Deputy Managing Director and Chair stated after the Executive Board discussion yesterday that the coronavirus pandemic “has hit the Georgian economy hard”.
A drop in external demand and tourism has widened the current account deficit, led to a depreciation of the exchange rate, and a substantial decline in economic activity. The authorities have acted rapidly by introducing sweeping containment measures and targeted support to households and to most affected sectors”, he said.
Zhang also noted that “the fiscal deficit has increased and external financing has been mobilised to allow for additional spending”.
Advancing structural reforms would help sustain medium-term growth potential and achieve a faster recovery after the pandemic. Adopting the indexation rule for public pension would contribute to sustain the income of pensioners. Completing the banking resolution framework and implementing the insolvency framework would help support the recovery”, Zhang added.
He considers that “augmentation of access” under the Extended Fund Facility arrangement should support the authorities’ policies to address the COVID-19 shock and help meet the urgent balance-of-payments need.
Georgian Prime Minister Giorgi Gakharia has thanked the IMF on Twitter:
He said this is "a strong message for the international donor community" and "together we will combat the invisible enemy".