IMF completes eighth & final review of Georgia’s economic reform programme
This is the last review under the arrangement and its completion will release about $111 million, bringing total disbursements to about $687 million. Photo: Nino Alavidze/Agenda.ge.
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The executive board of the International Monetary Fund (IMF) has just completed the eighth review of Georgia’s economic reform programme supported by a four-year extended arrangement under the Extended Fund Facility (EFF ).
This is the last review under the arrangement and its completion will release about $111 million, bringing total disbursements to about $687 million.
The review reads that repeated restrictions on movement and economic activity took a toll on economic growth with output contracting by 6.2% in 2020, but the authorities’ policy response helped limit the human toll of the pandemic and 'rightly focused' on protecting the vulnerable.
After successfully navigating the second wave of Covid-19 and commencing vaccinations, Georgia is at a potential turning point in overcoming the fallout of the pandemic. The next steps are to decisively bring Covid-19 under control, secure the recovery, and maintain macroeconomic policy discipline in a challenging environment. Under the baseline, a strong recovery is expected to commence in the second quarter of 2021 and output is expected to expand by 3.5% for the year", says the IMF.
The review discusses the devaluation of the Georgian national currency, the lari, and notes that monetary policy may need to be increased to target inflation.
Due to consecutive shocks related to concerns over travel restrictions in the second half of 2019, the outbreak of the pandemic in early 2020, and recent spillovers of trading partner currency volatility, the lari has come under repeated bouts of pressure... The most recent policy rate increase responds to elevated inflation expectations following a somewhat prolonged period of inflation exceeding its target. Further increases in the policy rate may be needed if external pressures persist", says the IMF.
The IMF suggests that in addition to prudent macroeconomic policies, advancing the structural reform agenda will be essential to sustain a durable and inclusive recovery. The review reads that the near-term priorities are operationalising the insolvency framework to deal with the aftermath of the Covid-19 shock, and education reform.
The International Monetary Fund (IMF) Executive Board has completed the Seventh Review of Georgia’s economic reform programme supported by a four-year extended arrangement under Extended Fund Facility (EFF) and approved a disbursement of $113.9 million to help the Georgian economy amid Covid-19 shocks.
The International Monetary Fund (IMF) expects gross domestic product growth to rebound to 4.3 per cent in 2021 'as the effects of the pandemic fade, but considerable downside risks remain', says the IMF staff team led by Mercedes Vera Martin who conducted virtual discussions from October 5 to November 9, 2020, on the seventh review under the Extended Fund Facility (EFF) arrangement.
The International Monetary Fund (IMF) has upgraded its World Economic Outlook which now says that the Georgian economy will grow five per cent in 2021 and the average growth rate will be 5.5 per cent in 2021-2025. The IMF says that the nominal GDP per capita in terms of purchasing power parity will exceed $20,000 for the first time in 2024 in Georgia, and $21,000 by 2025.
Economic growth in Georgia is projected to reach 3 per cent in 2021, while it will be reduced by 4 per cent in 2020, says the International Monetary Fund (IMF) in its World Economic Outlook. It says that the COVID-19 pandemic is inflicting high and rising human costs worldwide and the necessary protection measures are severely impacting economic activity.
Georgian Deputy Finance Minister Mikheil Dundua says that according to the economic growth forecast of the International Monetary Fund the Georgian economy will grow by 34.5% in 2021-2026 and with this rate Georgia ranks first in Europe.
The National Bank of Georgia (NBG) offered $40 million at the foreign exchange auction today of which $25.4 million was bought, announces the NBG. The official exchange rate shows that as of today 1 USD costs 3.4363 GEL and 1 EUR costs 4.1115 GEL.
The National Bank of Georgia (NBG) has sold $30 million at foreign exchange auction today as a result of which the national currency, the lari, has strengthened slightly against the US dollar and depreciated against the euro.
The Georgian economy is expected to grow by 3.5% in 2021, rebounding with the gradual lifting of the Covid-19 pandemic restrictions and revival of domestic demand, reads the Asian Development Bank (ADB) Outlook 2021.
The Georgian lari has strengthened against the US dollar today to 3.0375 GEL / $1 USD as of 11 a.m. today. June 4 trading opened the day with the GEL/USD rate at 3.10, which further fell by almost 7.25 tetri and currently stands at 3.0375 GEL.