IMF Executive Board Approves US$280 million Stand-By Arrangement for Georgia

  • The IMF approved a three-year Stand-By Arrangement (SBA) for Georgia of US$280 million.
  • The program focuses on rebuilding fiscal buffers, strengthening fiscal frameworks, reducing external vulnerabilities and inflation, maintaining financial sector resilience, and fostering stronger and more inclusive growth.
  • The authorities intend to treat the arrangement as precautionary.

The Executive Board of the International Monetary Fund (IMF) in 15 June approved a US$280 million (100 percent of quota and SDR 210.4 million) Stand-By Arrangement for Georgia which provides support for the authorities’ economic policies over the next three years. The Board’s decision makes about US$40 million (SDR 30 million or 14.3 percent of Georgia’s quota) immediately available. The Georgian authorities intend to treat the new arrangement as precautionary.

The authorities’ IMF-supported program seeks to further entrench macroeconomic stability, build resilience, and strengthen medium-term growth as the country emerges from the COVID-19 pandemic and contends with spillovers from the war in Ukraine.

 

Following the Executive Board’s discussion on Georgia, Mr. Bo Li, Deputy Managing Director, made the following statement:

“The Georgian economy has been resilient to the COVID-19 pandemic, reflecting the authorities’ strong policy response, which helped to cushion the impact of the shock. The robust recovery from the pandemic is likely to slow, given Georgia’s vulnerability to spillovers from the war in Ukraine, which are also expected to increase inflation and widen the current account deficit.

“The Georgian authorities have adopted a program focused on addressing macroeconomic challenges, including reducing the fiscal deficit, inflation, and external vulnerabilities, and advancing the necessary structural reforms to strengthen growth. The program will be supported by a Stand-by Arrangement, which the authorities intend to treat as precautionary.

“Rebuilding fiscal buffers, while reducing debt and protecting the vulnerable will be key. The authorities recognize the importance of adhering to the fiscal rule to anchor policy credibility, and are targeting full compliance with the fiscal rule’s deficit ceiling by 2023. Important measures, such as saving revenue overperformance, strengthening tax administration, streamlining tax expenditures, and developing a medium-term revenue strategy would help facilitate priority spending while rebuilding fiscal buffers. Strengthening public financial management and reforming state-owned enterprises would help to mitigate fiscal risks.

 

Source: International Monetary Fund 

See detailed information: https://www.imf.org/en/News/Articles/2022/06/15/pr22203-georgia-imf-executive-board-approves-us-280-million-sba