S&P's upgrades Georgia's credit rating

Finance Materials 12 October 2019 15:50 (UTC +04:00)

Baku, Azerbaijan, October 12

By Tamilla Mammadova – Trend:

Standard & Poor’s global rating company (S&P's) raised Georgia’s sovereign credit rating by one point to “BB” with a stable outlook, Trend reports citing S&P's.

This is the first improvement since 2011, when Georgia was rated “BB-” (BB minus).

According to the S&P's report, despite external challenges, Georgia has shown relatively high economic growth in recent years, an average of about 4 percent in 2015-2018. The company gives a positive forecast for the future, as it believes that the government’s policy will be to diversify exports and foreign investment, as well as to develop infrastructure.

The company expects growth of Georgia’s GDP by 4.5 percent this year, which is half a percent higher than the previous forecast. According to S&P's, in 2019-2022, the average growth rate will be 4 percent, which is higher than in other countries of the region.

However, the report states that in 2019, the country's GDP per capita is $4,300, which is a globally low indicator. By 2020, this figure will approach $5,000.

The report also analyses Georgian exports. Deliveries of Georgian products to the EU have increased by 30 percent since the entry into force of the Agreement on Deep and Comprehensive Free Trade (DCFTA). DCFTA defines three free trade areas established between the European Union, and Georgia, Moldova and Ukraine respectively.

Among the possible risks for the Georgian economy, the report named fluctuations in the exchange rate of national currencies of Turkey and Russia.