IMF makes $40 mln available for Georgia after Mission Head visit

The International Monetary Fund on Thursday announced the completion of the second review under the Stand-By Arrangement with Georgia, with the process making about $40 million in support available to the country.

The approval came during a visit to Georgia of the IMF Mission Head James John, who noted “productive discussions” with the Georgian authorities.

The Fund said the Georgian economy continued to “perform strongly, driven by robust tourism, transit trade, and financial inflows triggered by Russia’s war in Ukraine, and supported by prudent macroeconomic policies”.

• Economy Minister, IMF mission assess Georgia’s compliance with standby loan terms

In his own comments, John said the country’s economy had “performed strongly since the pandemic, reflecting limited adverse spillovers from Russia’s war in Ukraine and prudent macroeconomic policies”.

Buoyant tourism and a surge in immigration, financial inflows, and transit trade triggered by the war in Ukraine have boosted growth and fiscal revenues, and strengthened the current account balance and the lari”, he pointed out.

The IMF representative also shared the institution’s estimations that said the domestic economic growth was projected to “converge to its potential rate of a little above five percent in 2023”, while inflation would remain below the National Bank of Georgia’s three percent target.

Over the medium term, growth is expected to remain close to potential, supported by infrastructure investments and an expected improvement in global economic and financial conditions. Inflation is forecast to be close to target in 2024”, he said.

In recommendations, John noted policies should remain focused on rebuilding fiscal and foreign exchange buffers and maintaining reform momentum to further entrench macroeconomic and financial stability and support inclusive growth, given “high uncertainty especially in the external environment”.

He also welcomed the Georgian Government’s efforts in fulfilling recommendations of structural reforms in the areas of tax policy and administration, public investment management, fiscal risks, NBG communications and financial supervision.