IMF to approve $38mln after first review of stand-by arrangement for Georgia

Georgian authorities and the International Monetary Fund have reached a staff-level agreement on policies for completion of the first review of the stand-by arrangement following "productive discussions" between the sides, which will allow the organisation to allocate $38 million for the country, the IMF announced on Monday.

The fund’s mission visited Georgia between October 26-November 7 to discuss the first review of Georgia’s economic reform programme supported by an IMF stand-by arrangement. 

The agreement is subject to approval by IMF management and consideration by the executive board, which is expected in December 2022. Completion of the review will make about $38 million available to Georgia. The authorities are treating the programme as precautionary", James John, the head of the IMF team, said following the visit. 

In his statement released on Monday, John said the Georgian economy had "performed strongly in 2022 as adverse spillovers from the war in Ukraine thus far have generally been less impactful than expected earlier". 

"Buoyant tourism revenues, a surge in immigration and financial inflows triggered by the war, and a rise in transit trade through Georgia come on the heels of a robust recovery from the pandemic and have lifted growth and fiscal revenues, strengthened the current account balance and the lari [national currency], and supported accumulation of foreign currency reserves”, he said.

“Credit growth has slowed, but inflation remains elevated reflecting still high commodity prices and strong domestic demand. Quick and appropriate [national bank of Georgia] action has helped limit the impact of the war on the financial sector, including by requiring banks to adhere to relevant sanctions", he added.

John also said the Georgian economy growth was now projected at 10 percent in 2022, while annual inflation was forecast to close the year at 10.5 percent.