## IMF Executive Board Completes the Sixth Review under the Extended Fund Facility and Approves the Request for Augmentation of Access to Support Georgia Address the COVID-19 Pandemic

_IMF News, May 1, 2020_

## Source details

**Canonical URL:** [IMF Executive Board Completes the Sixth Review under the Extended Fund Facility and Approves the Request for Augmentation of Access to Support Georgia Address the COVID-19 Pandemic](https://www.imf.org/en/news/articles/2020/05/01/pr20202-georgia-imf-execbrd-complete-6threv-eff-approves-request-support-address-covid19)

## Other formats

- [Markdown version](/en/news/articles/2020/05/01/pr20202-georgia-imf-execbrd-complete-6threv-eff-approves-request-support-address-covid19/index.md)
- [Structured JSON version](/en/news/articles/2020/05/01/pr20202-georgia-imf-execbrd-complete-6threv-eff-approves-request-support-address-covid19/index.json)
- [Bundle manifest](/en/news/articles/2020/05/01/pr20202-georgia-imf-execbrd-complete-6threv-eff-approves-request-support-address-covid19/bundle-manifest.json)

## Bibliographic details
- Published: May 1, 2020

---

### Executive Board action and program status
- The IMF Executive Board completed the Sixth Review of Georgia’s economic reform program supported by a three-year extended arrangement under the Extended Fund Facility (EFF).
- The Executive Board approved an augmentation of access of 130 percent of quota, bringing total access under the EFF to SDR484 million (230 percent of quota).
- The completion of the review will release SDR147 million (about $200 million) for budget support to help Georgia meet urgent balance of payments and fiscal needs stemming from the COVID-19 pandemic.
- Total disbursements so far under the arrangement amount to SDR327 million (about $448 million).
- The Executive Board approved the authorities’ request for a waiver of nonobservance for the performance criteria on the ceiling on the augmented general government deficit.

### Financial support and intended use
- SDR147 million (about $200 million) disbursement designated for budget support to address urgent balance of payments and fiscal needs related to the COVID-19 pandemic, including increased spending on health services and social protection.
- The IMF financial support is expected to contribute substantially toward increasing health spending and social safety nets.

### Economic outlook and pandemic impact
- The pandemic is expected to have a significant impact on Georgia’s economy, interrupting the positive economic trajectory of past years.
- Observed and cited economic effects include:
  - A drop in external demand and tourism.
  - A widened current account deficit.
  - Depreciation of the exchange rate.
  - A substantial decline in economic activity.
- Authorities’ response measures noted:
  - Sweeping containment measures.
  - Targeted support to households and most affected sectors.
  - Increased public spending and mobilization of external financing.

### Policy advice and recommendations (from IMF Deputy Managing Director Tao Zhang)
- Maintain vigilance to safeguard debt sustainability, particularly against fiscal risks arising from state-owned enterprises.
- Monetary policy:
  - The National Bank of Georgia has appropriately maintained a moderately tight monetary policy stance while allowing the exchange rate to remain flexible.
  - Monetary policy decisions should be based on close monitoring of inflationary expectations.
- Structural reforms recommended to support medium-term growth potential and faster recovery:
  - Adopt the indexation rule for public pension to help sustain pensioners’ incomes.
  - Complete the banking resolution framework.
  - Implement the insolvency framework.
- The augmentation of access under the EFF should support authorities’ policies to address the COVID-19 shock and help meet urgent balance-of-payments needs.

### Selected economic and financial indicators (2018–21) — key figures from Table 1
- Real GDP (annual percentage change):
  - 2018: 4.8
  - 2019: 4.6
  - CR 19/3721/ New GDP Proj. 2020: 5.1
  - 2021: 4.3
  - 2020 (projection reflecting COVID shock): -4.0
  - 2021 (alternate/new projection): 4.0
- Output gap:
  - 2018: -1.5
  - 2019: -1.0
  - 2020: -0.5
  - 2021: -1.7
- Nominal GDP (in billion of laris):
  - 2018: 44.6
  - 2019: 49.0
  - CR 19/3721/ New GDP Proj. 2020: 50.0
  - 2021: 53.4
  - 2020 (projection reflecting COVID shock): 50.3
  - 2021 (alternate/new projection): 54.5
- Nominal GDP (in billion of US$):
  - 2018: 17.6
  - 2019: 17.5
  - CR 19/3721/ New GDP Proj. 2020: 17.7
  - 2021: 18.7
  - 2020 (projection reflecting COVID shock): 15.1
- GDP per capita (in thsnd. of US$):
  - 2018: 4.7
  - 2019: 4.1
- CPI, period average:
  - 2018: 2.6
  - 2019: 4.5
  - CR 19/3721/ New GDP Proj. 2020: 3.6
- CPI, end-of-period:
  - 2018: 1.5
  - 2019: 7.2
  - CR 19/3721/ New GDP Proj. 2020: 7.0
  - 2021: 3.0
  - 2020 (projection reflecting COVID shock): 3.5
- Investment and saving (in percent of GDP):
  - Gross national saving:
    - 2018: 26.5
    - 2019: 26.2
    - CR 19/3721/ New GDP Proj. 2020: 28.7
    - 2021: 20.3
    - 2020 (projection reflecting COVID shock): 25.5
  - Investment:
    - 2018: 33.3
    - 2019: 31.2
    - CR 19/3721/ New GDP Proj. 2020: 33.8
    - 2021: 31.1
    - 2020 (projection reflecting COVID shock): 31.6
    - 2021 (alternate/new projection): 33.0
  - Public investment share:
    - 2018: 7.9
    - 2019: 6.6
  - Private investment share:
    - 2018: 26.9
    - 2019: 24.0
    - CR 19/3721/ New GDP Proj. 2020: 25.9
    - 2021: 24.4
    - 2020 (projection reflecting COVID shock): 25.2
    - 2021 (alternate/new projection): 26.6
- Consolidated government operations (percent of GDP):
  - Revenue and grants:
    - 2018: 26.4
    - 2019: 26.7
    - CR 19/3721/ New GDP Proj. 2020: 25.4
    - 2021: 24.1
    - 2020 (projection reflecting COVID shock): 24.7
  - o.w. Tax revenue:
    - 2018: 23.4
    - 2019: 23.5
    - CR 19/3721/ New GDP Proj. 2020: 23.7
    - 2021: 23.0
    - 2020 (projection reflecting COVID shock): 21.4
    - 2021 (alternate/new projection): 22.2
  - Expenditures:
    - 2018: 29.2
    - 2019: 28.8
    - CR 19/3721/ New GDP Proj. 2020: 29.1
    - 2021: 28.3
    - 2020 (projection reflecting COVID shock): 32.9
    - 2021 (alternate/new projection): 29.9
  - Current expenditures:
    - 2018: 21.3
    - 2019: 21.0
    - CR 19/3721/ New GDP Proj. 2020: 23.2
  - Capital spending and budget lending:
    - 2018: 7.6
    - 2019: 8.1
    - CR 19/3721/ New GDP Proj. 2020: 6.9
    - 2021: 6.7
    - 2020 (projection reflecting COVID shock): 6.8
  - Net lending/borrowing (GFSM 2001):
    - 2018: -0.8
    - 2019: -1.8
    - CR 19/3721/ New GDP Proj. 2020: -2.2
    - 2021: -8.2
    - 2020 (projection reflecting COVID shock): -4.4
  - Augmented net lending / borrowing (program definition) 3/:
    - 2018: -2.3
    - 2019: -2.1
    - CR 19/3721/ New GDP Proj. 2020: -2.0
    - 2021: -2.5
    - 2020 (projection reflecting COVID shock): -8.5
    - 2021 (alternate/new projection): -4.8
- Public debt 4/ (percent of GDP):
  - 2018: 41.3
  - 2019: 44.1
  - CR 19/3721/ New GDP Proj. 2020: 42.7
  - 2021: 44.5
  - 2020 (projection reflecting COVID shock): 62.8
  - 2021 (alternate/new projection): 59.6
  - o.w. Foreign-currency denominated:
    - 2018: 32.5
    - 2019: 34.3
    - CR 19/3721/ New GDP Proj. 2020: 33.7
    - 2021: 50.6
    - 2020 (projection reflecting COVID shock): 45.6
  - Public debt net of government deposits 4/:
    - 2018: 38.8
    - 2019: 40.9
    - CR 19/3721/ New GDP Proj. 2020: 39.8
    - 2021: 54.0
    - 2020 (projection reflecting COVID shock): 51.2
- Money and credit:
  - Credit to the private sector (annual % change):
    - 2018: 19.3
    - 2019: 17.3
    - CR 19/3721/ New GDP Proj. 2020: 19.9
    - 2021: 8.5
    - 2020 (projection reflecting COVID shock): 5.9
  - In constant exchange rate:
    - 2018: 17.0
    - 2019: 11.5
    - CR 19/3721/ New GDP Proj. 2020: 15.2
    - 2021: 7.5
    - 2020 (projection reflecting COVID shock): 8.2
  - Broad money (annual % change):
    - 2018: 14.0
    - 2019: 14.7
    - CR 19/3721/ New GDP Proj. 2020: 16.1
    - 2021: 9.2
  - Broad money (incl. FX deposits, annual % change):
    - 2018: 13.3
    - 2019: 14.9
    - CR 19/3721/ New GDP Proj. 2020: 16.0
    - 2021: 3.1
    - 2020 (projection reflecting COVID shock): 8.3
    - 2021 (alternate/new projection): 11.9
    - Additional entries displayed in table: 11.8, -4.6, 16.7
  - Deposit dollarization (in percent of total):
    - 2018: 62.1
    - 2019: 62.9
    - CR 19/3721/ New GDP Proj. 2020: 61.9
    - 2021: 62.7
    - 2020 (projection reflecting COVID shock): 62.4
    - 2021 (alternate/new projection): 58.4
  - Credit dollarization (in percent of total):
    - 2018: 55.8
    - 2019: 53.7
    - CR 19/3721/ New GDP Proj. 2020: 54.4
    - 2021: 51.3
    - 2020 (projection reflecting COVID shock): 51.6
    - 2021 (alternate/new projection): 49.2
  - Credit-to-GDP ratio:
    - 2018: 58.8
    - 2019: 62.5
    - CR 19/3721/ New GDP Proj. 2020: 66.2
    - 2021: 63.3
- External sector:
  - Current account balance (in billions of US$):
    - 2018: -1.2
    - 2019: -0.9
    - CR 19/3721/ New GDP Proj. 2020: -1.3
  - Current account balance (percent of GDP):
    - 2018: -6.8
    - 2019: -5.0
    - CR 19/3721/ New GDP Proj. 2020: -5.1
    - 2021: -4.9
    - 2020 (projection reflecting COVID shock): -11.3
    - 2021 (alternate/new projection): -7.5
  - Trade balance (percent of GDP):
    - 2018: -23.4
    - 2019: -20.9
    - CR 19/3721/ New GDP Proj. 2020: -21.0
    - 2021: -20.5
    - 2020 (projection reflecting COVID shock): -20.4
    - 2021 (alternate/new projection): -19.8
  - Terms of trade (percent change):
    - 2018: 0.2
    - 2019: 1.8
    - CR 19/3721/ New GDP Proj. 2020: 3.9
  - Gross international reserves (in billions of US$):
    - 2018: 3.3
    - 2019: 3.4
  - Gross international reserves (in percent of IMF Composite measure (floating)):
    - 2018: 95.4
    - 2019: 96.4
    - CR 19/3721/ New GDP Proj. 2020: 99.0
    - 2021: 95.9
    - 2020 (projection reflecting COVID shock): 103.9
    - 2021 (alternate/new projection): 98.5
  - Gross external debt:
    - 2018: 100.3
    - 2019: 109.3
    - CR 19/3721/ New GDP Proj. 2020: 103.4
    - 2021: 108.1
    - 2020 (projection reflecting COVID shock): 136.3
    - 2021 (alternate/new projection): 124.1
  - Gross external debt, excl. intercompany loans:
    - 2018: 82.2
    - 2019: 87.7
    - CR 19/3721/ New GDP Proj. 2020: 85.0
    - 2021: 86.7
    - 2020 (projection reflecting COVID shock): 111.4
    - 2021 (alternate/new projection): 102.2
- Exchange rates and REER:
  - Lari per US$ (period average):
    - 2018: 2.53
    - 2019: 2.82
  - Lari per euro (period average):
    - 2018: 2.99
    - 2019: 3.15
  - REER (period average; CPI based, 2010=100):
    - 2018: 104.1
    - 2019: 98.1

*IMF Communications Department, May 1, 2020.*

---

## Content in this bundle

- **Press Release-English**
  - [Press Release-English (Markdown version)](/-/media/files/news/press-release/2020/pr20202-geo-georgia.pdf.md){rel="alternate" type="text/markdown"}
  - [Press Release-English (PDF)](/-/media/files/news/press-release/2020/pr20202-geo-georgia.pdf){rel="external" type="application/pdf"}

---

## References

- [https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)
- [The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)
- [Georgia and the IMF](http://www.imf.org/external/country/GEO/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/Publications/CR/Issues/2019/12/18/Republic-of-Georgia-Fifth-Review-Under-the-Extended-Arrangement-Requests-for-Waivers-of-48888](https://www.imf.org/en/Publications/CR/Issues/2019/12/18/Republic-of-Georgia-Fifth-Review-Under-the-Extended-Arrangement-Requests-for-Waivers-of-48888)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2020/05/01/pr20202-georgia-imf-execbrd-complete-6threv-eff-approves-request-support-address-covid19_