...

Georgia's external debt up due to COVID-19 shock - IMF

Business Materials 12 April 2021 17:55 (UTC +04:00)
Georgia's external debt up due to COVID-19 shock - IMF

BAKU, Azerbaijan, April 12

Tamilla Mammadova – Trend:

Georgia's external debt has risen due to the shock caused by the coronavirus, said Director of the Middle East and Central Asia Department at the International Monetary Fund Jihad Azour, Trend reports via Georgian media.

The IMF predicts 63.8 percent of Georgia's external debt to GDP ratio by the end of 2021.

According to Azour, Georgia is a country with an open economy, tourism is an important sector here. Therefore, it is normal that this crisis affects the economic situation.

“The Georgian government has taken important steps in 2020. The central bank wisely used exchange rate flexibility to reduce the impact of the shock on the Georgian economy. Of course, this led to an increase in debt. However, despite the increase in debt, the volume of Georgia's debt remains stable. Georgia has completed a review of its existing program that enabled Georgia to respond to additional humanitarian and health needs during the crisis,” he said.

As he noted, Georgia should re-prioritize spending to give additional space to capital spending, as well as improve infrastructure to help restore growth.

According to him, on the other hand, the measures presented by the National Bank of Georgia in terms of managing the exchange rate have reduced the impact of external shocks on the economy:

“It's important to keep inflation low. This is one of the most important elements of stability in Georgia, ”he said.

He also noted that the restoration of the Georgian economy will be based on two priorities. And in this regard, it is important to help sectors such as tourism, and the second priority should be an investment in promising sectors.

According to Azour, the last element that will help the Georgian economy is strengthening ties with the European Union, as well as with neighboring countries.

---

Follow the author on Twitter: @Mila61979356

Tags:
Latest

Latest