Moody's Investors Service ("Moody's") has affirmed the Government of Georgia's Ba2 local and foreign currency long-term issuer ratings and foreign currency senior unsecured rating. The outlook remains stable.

The rating affirmation and stable outlook are underpinned by the ongoing development of the fiscal and monetary institutions which has enabled an effective macroeconomic policy response to the pandemic-related downturn. Structural reforms carried out during the four-year Extended Fund Facility with the International Monetary Fund have also helped to buttress the economy's flexibility in response to shocks. While fiscal metrics have deteriorated as a result of the COVID shock and the policy response to it, fiscal consolidation accomplished ahead of the pandemic created capacity for an effective policy response and provides a track record suggesting that fiscal repair will occur as the impact of the pandemic wanes. Moody's assumes that the recent political tensions will not derail the reform agenda.

Georgia's local and foreign currency country ceilings remain unchanged at Baa1 and Baa3, respectively. The four-notch gap between the local currency ceiling and the sovereign rating reflects a relatively small government footprint in the economy and strong institutions which are predictable and reliable in terms of policy action, notwithstanding a relatively high current account deficit and ongoing domestic political risks that point to some country risk. The two-notch gap between the foreign currency ceiling and the local currency ceiling incorporates Georgia's external vulnerabilities including a relatively high current account deficit and still high levels of dollarization in the economy which increase transfer and convertibility risks.

Source: Moody's Investors Service

See detailed information: https://www.moodys.com/research/Moodys-affirms-Georgias-ratings-at-Ba2-maintains-stable-outlook--PR_453867