Azerbaijan, Baku / Trend /The Executive Board of the International Monetary Fund (IMF) today completed the six and final review of Georgia's economic performance under the three-year program supported by the Poverty Reduction and Growth Facility (PRGF) arrangement.
In completing the review, the Board approved the authorities' request to waiver the non-observance of the end of December 2006 structural performance criterion on the enactment of legislation, bringing Georgia's fit and proper regulations in line with international practice.
Completion of this review will enable Georgia to make the final drawing for an amount equivalent to SDR 14 million (about US$21.3 million) under the project.
The Executive Board approved the PRGF arrangement on June 4, 2004 for an amount equivalent to about US$150 million.
Following the Executive Board discussion of Georgia's economic performance, Mr. Takatoshi Kato, Deputy Managing Director and Acting Chair, said that Georgia's economic performance has been impressive in recent years, with rapid growth maintained over the last year despite the loss of major export markets. Such resilience reflects the authorities' pursuit of consistently strong policies, allowing them to achieve macroeconomic stability and remarkable improvements in fiscal performance and business environment.
"This success has, however, brought challenges, in the form of large foreign inflow and a widening current account deficit. In response, the government plans to implement a tighter-than-budgeted fiscal stance this year to avoid overheating and limit the pressure for the lari, which could undermine international competitiveness. The National Bank of Georgia will maintain its focus on keeping inflation in single digits. In the medium term, budget surpluses are likely to be needed as long as foreign inflow remains strong. "The authorities intend to remain closely engaged with the Fund after the expiration of the PRGF arrangement," Mr. Kato said.