BAKU, Azerbaijan, April 20
By Tamilla Mammadova – Trend:
The completion of the 8th and final review of the Extended Fund Facility (EFF) program is an important milestone in the very fruitful and collaborative partnership between the IMF and Georgia, said Subir Lall, the acting Chief of IMF Mission for Georgia, Trend reports via Georgian media.
He made the remark during a video conference regarding the completion of the eighth review of the Extended Fund Facility supported program.
The Georgian people have endured a difficult and truly unprecedented global crisis and fortunately, we are now seeing the light at the end of the tunnel, although we have not left the tunnel yet. This has taken tremendous patience and courage, which we all applaud" he said.
According to Lall, the authorities’ home-grown reform program aimed to strengthen the fiscal position of the government and make the economy more resilient to shocks.
"Last year, the program’s size was augmented to help deal with the COVID-19 shock and for us in the IMF to do our part in ensuring the international community collectively was able to enhance its support for Georgia at this difficult time,"
As he noted, overall prudent macroeconomic policies and the building up of external and fiscal buffers under the program meant that Georgia was in a stronger position to meet the COVID-19 shock. Were it not for this building up of resilience prior to the pandemic, the Georgian economy would have felt a much greater adverse impact due to the COVID-19 pandemic.
Naturally, the pandemic led to a significant rise in the fiscal deficit and debt as the government increased its support to businesses and households and as revenues declined. The current account deficit increased significantly as tourism revenues collapsed. This was a natural and expected outcome from this shock and the appropriate policy response to the shock.
"In Georgia, output contracted by 6.2 percent in 2020. We now expect the Georgian economy to resume growth this year and project output to expand by 3.5 percent this year, assuming no renewed lockdowns," he added.
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