IMF Executive Board Approves US$280 million Stand-By Arrangement for Georgia
IMF News, June 15, 2022
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Bibliographic details
- Published: June 15, 2022
Program overview and access
- The Executive Board approved a three-year Stand-By Arrangement (SBA) for Georgia of US$280 million.
- The arrangement equals "100 percent of quota and SDR 210.4 million."
- About US$40 million (SDR 30 million or 14.3 percent of Georgia’s quota) is immediately available.
- The Georgian authorities intend to treat the arrangement as precautionary.
Program objectives and focus
- The program focuses on:
- rebuilding fiscal buffers,
- strengthening fiscal frameworks,
- reducing external vulnerabilities and inflation,
- maintaining financial sector resilience,
- fostering stronger and more inclusive growth.
- The program seeks to "further entrench macroeconomic stability, build resilience, and strengthen medium-term growth" as Georgia emerges from the COVID-19 pandemic and contends with spillovers from the war in Ukraine.
Key policy priorities and recommendations (from Deputy Managing Director Bo Li)
- Fiscal policy and public finances:
- Rebuild fiscal buffers while reducing debt and protecting the vulnerable.
- Adhere to the fiscal rule and target "full compliance with the fiscal rule’s deficit ceiling by 2023."
- Important measures: saving revenue overperformance, strengthening tax administration, streamlining tax expenditures, developing a medium-term revenue strategy.
- Strengthen public financial management and reform state-owned enterprises to mitigate fiscal risks.
- Monetary and exchange rate policy:
- Maintain a monetary policy stance focused on bringing down high inflation.
- Maintain exchange rate flexibility, strengthen reserves, and enhance the central bank’s communication strategy.
- The central bank required banks to adhere to international sanctions, which "has limited risks."
- Financial sector:
- Continue enhancing financial sector regulation and supervision to support resilience.
- Next steps: enhance financial safety nets, foster capital market development, and strengthen the AML/CFT framework.
- A sound financial sector and sustained macroeconomic policy implementation will help reduce dollarization and related vulnerabilities.
- Structural reforms and growth:
- Reinvigorate the structural reform agenda to support stronger and more inclusive growth.
- Strengthen the business environment and enhance governance to improve competitiveness.
- Tackle entrenched high unemployment by advancing education reform and strengthening active labor market policies.
- Increase investment in information technology infrastructure and accelerate digitalization.
Selected economic and financial indicators, 2019–23 (actual, preliminary, projections)
- National accounts and prices (annual percentage change; unless otherwise indicated)
- Real GDP: 2019 = 5.0; 2020 = -6.8; 2021 = 10.4; 2022 = 3.2; 2023 = 5.8
- Nominal GDP (in billions of laris): 2019 = 49.3; 2020 = 60.2; 2021 = 69.0; 2022 = 77.0
- Nominal GDP (in billions of U.S. dollars): 2019 = 17.5; 2020 = 15.8; 2021 = 18.7; 2022 = 22.3; 2023 = 24.2
- GDP per capita (in thousands of U.S. dollars): 2019 = 4.7; 2020 = 4.3; 2021 = 6.0; 2022 = 6.5
- GDP deflator, period average: 2019 = 4.9; 2020 = 7.3; 2021 = 10.6; 2022 = 11.3; 2023 = 5.3
- CPI, Period average: 2019 = 5.2; 2020 = 9.6; 2021 = 10.9; 2022 = 5.1
- CPI, End-of-period: 2019 = 7.0; 2020 = 2.4; 2021 = 13.9; 2022 = 8.1; 2023 = 3.4
- Consolidated government operations (in percent of GDP)
- Revenue and grants: 2019 = 27.1; 2020 = 25.2; 2021 = 25.4; 2022 = 25.3
- o.w. Tax revenue: 2019 = 23.7; 2020 = 22.5; 2021 = 22.8; 2022 = 23.1
- Expenditures: 2019 = 28.9; 2020 = 34.5; 2021 = 31.4; 2022 = 29.1; 2023 = 28.0
- Expense: 2019 = 21.4; 2020 = 26.3; 2021 = 24.5; 2022 = 21.7; 2023 = 21.9
- Net acquisition of non-financial assets: 2019 = 7.6; 2020 = 8.2; 2021 = 6.9; 2022 = 7.4; 2023 = 6.1
- Capital spending: 2019 = 8.0; 2020 = 8.6; 2021 = 6.4
- Privatization proceeds: 2019 = -0.4; 2020 = -0.7; 2021 = -0.3
- Net lending / borrowing after adjustment: 2019 = -1.8; 2020 = -9.3; 2021 = -6.0; 2022 = -3.9; 2023 = -2.6
- Net budget lending: 2019 = 0.2; 2020 = 0.1
- Augmented Net lending / borrowing (program definition) 1/: 2019 = -2.1; 2020 = -9.4; 2021 = -6.1; 2022 = -4.0; 2023 = -2.8
- General government debt 2/: 2019 = 40.4; 2020 = 49.5; 2021 = 47.1; 2022 = 45.8
- o.w. Foreign-currency denominated: 2019 = 32.0; 2020 = 47.6; 2021 = 39.8; 2022 = 37.5; 2023 = 35.5
- Money and credit
- Credit to the private sector: 2019 = 20.7; 2020 = 22.4; 2021 = 12.4; 2022 = 20.9; 2023 = 11.6
- In constant exchange rate: 2019 = 16.1; 2020 = 9.0; 2021 = 18.2; 2022 = 21.2; 2023 = 9.9
- Broad money: 2019 = 17.6; 2020 = 24.6; 2021 = 19.9; 2022 = 14.0
- In constant exchange rate (estimate): 2019 = 14.3; 2020 = 14.4; 2021 = 15.4; 2022 = 20.4; 2023 = 11.8
- Broad money (excl. fx deposits): 2019 = 18.8; 2020 = 17.8; 2021 = 16.8; 2022 = 14.6
- External sector (in percent of GDP; unless otherwise indicated)
- Current account balance: 2019 = -5.5; 2020 = -12.4; 2021 = -9.8; 2022 = -10.9; 2023 = -7.5
- Trade balance: 2019 = -21.4; 2020 = -20.0; 2021 = -20.1; 2022 = -20.3; 2023 = -19.6
- Terms of trade, goods (percent change): 2019 = -0.6; 2020 = 4.1; 2021 = -14.0; 2022 = -8.9; 2023 = 1.4
- Gross international reserves (in billions of US$) 3/: 2019 = 3.5; 2020 = 3.9; 2021 = 3.3
- In percent of IMF Composite measure (floating): 2019 = 101.1; 2020 = 108.1; 2021 = 107.7; 2022 = 79.4; 2023 = 74.9
- Gross external debt: 2019 = 87.7; 2020 = 109.6; 2021 = 98.2; 2022 = 85.8; 2023 = 80.6
Notes and definitions (as presented)
- Augmented Net lending / borrowing (program definition) = Net lending / borrowing - Budget lending.
- General government debt excludes domestic legacy debt amounting to 1.2 percent of GDP.
- Gross international reserves use current exchange rates; includes SDR allocations (SDR 144 million before 2021 and SDR 346 million since 2021).
IMF Communications Department; Press Release No. 22/203; June 15, 2022.