Georgia: Sixth Review Under the Extended Arrangement and Requests for a Waiver of Nonobservance of Performance Criterion, Modification of Performance Criteria, and Augmentation of Access-Press Release; Staff Report; and Statement by the Executive Director for Georgia
IMF Staff Country Reports, May 5, 2020
Source details
- Canonical URL
- Georgia: Sixth Review Under the Extended Arrangement and Requests for a Waiver of Nonobservance of Performance Criterion, Modification of Performance Criteria, and Augmentation of Access-Press Release; Staff Report; and Statement by the Executive Director for Georgia
Other formats
Bibliographic details
- Published: May 5, 2020
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513542898.002
COVID-19 shock and macroeconomic impact
- The coronavirus disease 2019 (COVID-19) 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 produced a substantial decline in economic activity.
Authorities’ response and fiscal/sectoral support
- The authorities have acted rapidly by introducing:
- sweeping containment measures,
- targeted support to households,
- targeted support to most affected sectors.
Monetary policy stance and recommendations
- The National Bank of Georgia has appropriately maintained a moderately tight monetary policy stance, while allowing the exchange rate to remain flexible.
- Recommendation: Monetary policy decisions should be based on close monitoring of inflationary expectations.
Structural reforms and financial sector measures
- Advancing structural reforms would help sustain medium-term growth potential and achieve a faster recovery after the pandemic.
- Specific reform priorities highlighted:
- Adopting the indexation rule for public pension would contribute to sustain the income of pensioners.
- Completing the banking resolution framework would help support the recovery.
- Implementing the insolvency framework would help support the recovery.
IMF financing and program adjustments
- The 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.
Source: Georgia: Sixth Review Under the Extended Arrangement and Requests for a Waiver of Nonobservance of Performance Criterion, Modification of Performance Criteria, and Augmentation of Access—Press Release; Staff Report; and Statement by the Executive Director for Georgia (May 5, 2020), IMF Staff Country Reports.
Content in this bundle
- 1geoea2020001