Q2 of 2020: Georgia’s external debt increases, totals $18.8 bln

Georgia currently owes $18.8 billion in external debt, says the National Bank of Georgia (NBG).

• Government’s external debt has tripled in the last 8 years

During the second quarter of 2020 the gross external debt of Georgia increased by $435 million. Out of that $202 million increase was due to exchange rate changes, $199.4 million decrease was due to transactions, $33.2 million increase due to price changes and $370,500 - due to other  changes.

As for Georgia’s international investment position (IIP), the IPP amounted to -$23.5 billion for June 30, 2020, accounting for -140 per cent of the last four quarter gross domestic product. Net IIP deteriorated by $953.7 million compared to the previous quarter.

An IIP is a financial statement that explains the value and composition of a country’s external financial assets and liabilities. A positive IIP value indicates a nation is a creditor nation, while a negative value indicates it is a debtor nation, as is the case for Georgia.

Meanwhile other data from the NBG on the country’s balance of payment indicated how much money entered and left the country. The NBG said Georgia’s current account deficit amounted to $337.1 million in the second quarter of 2020. The trade of goods and income account made negative contribution into current account, while services and current transfers - positive. Current account deficit increased by 97.3 per cent from -3.9 per cent of GDP to -9.4 per cent of GDP, said the NBG.