IMF appproves Georgia's aid package
By Mushvig Mehdiyev
The International Monetary Fund (IMF) approved a $58.1 million financial aid package for Georgia.
Earlier in July, the IMF Executive Board approved a 36-month Stand-By Arrangement (SBA) with Georgia which envisaged allocation of $154 million to support the country’s economic program.
The board’s decision came on December 25 following the completion of the first review of Georgia’s economic performance under the three-year Stand-By Arrangement.
The IMF said Georgia continued to be in line with the program despite the challenging external environment and macroeconomic developments in 2014.
"A nearly 5 percent economic growth is expected in Georgia, backed by a strong domestic demand and fiscal expansion. Inflation has gradually increased, but still remains below the target of 6 percent for 2014. The current account deficit has reached 8.5 percent of GDP as expected under this year’s economic recovery. Although the fiscal policy is still supportive, the fiscal deficit is expected to be lower than 3.7 percent of GDP, which is provided in the program,” IMF noted.
However, the IMF officials believe that studies on the possible obstacles to access the finance weren't completed by September, as expected under the program.
"It will instead be finished in 2015 to gain more time to incorporate inputs from the key development partners and make a deeper assessment,” the IMF officials said.
IMF is confident that although there are downside risks in Georgia, including the recent fall in oil prices, the program could pave the way for growth by reducing the current account deficit.