BAKU, Azerbaijan, December 17
By Tamilla Mammadova – Trend:
On December 17, Executive Board of the International Monetary Fund (IMF) completed the Fifth Review of Georgia’s economic reform program supported by a three-year extended arrangement under the Extended Fund Facility (EFF), Trend reports referring to IMF.
The completion of the review will release SDR 30 million (about $41.4 million), bringing total disbursements under the arrangement to SDR 180 million (about $248.7 million).
The Executive Board has also approved the extension of the arrangement by one year until April 11, 2021, and rephrase access accordingly.
The extended arrangement for SDR 210.4 million (100 percent of quota) was approved by the Executive Board on April 12, 2017.
“Georgia’s economy has been resilient in the face of negative shocks, with solid growth and a lower current account deficit. However, the balance of risks is on the downside as domestic and international uncertainties could weigh on investment, reducing medium-term prospects," said Tao Zhang, IMF's Deputy Managing Director and Acting Chair.
As he noted, the recent high headline inflation rate reflects both temporary factors and the impact of the lari’s depreciation.
"The National Bank of Georgia (NBG) has appropriately tightened monetary policy to address inflationary pressures. Exchange rate flexibility remains vital as a shock absorber for the Georgian economy, and foreign exchange interventions should be limited to addressing excessive volatility or building reserves," the deputy managing director and acting chair said.
The Fifth Review is part of a three-year program aimed at supporting economic reform in Georgia initiated in April 2017.
Georgian authorities and the IMF team reached a staff-level agreement on completing the fifth review under the reform program supported by an IMF Extended Fund Facility and extending the arrangement by one year, subject to approval by Management and the Executive Board.
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