Page 38 - GEORptNov21

Georgia's public debt overview
A $467.4mn increase was recorded due to transactions and a $15.9mn increase was due to price changes. Meanwhile, a decrease of $332.8mn was due to exchange rate changes and a $127.9mn drop was due to other changes during the first quarter 2021, the NBG said.
Public sector external debt amounted to $9.9bn or 64% of GDP, while banking sector external debt amounted to $4.4bn or 28.5% of GDP.
Georgia’s international investment position (IIP) amounted to a negative $23.9bn to March 31, 2021. Net IIP has improved by $1bn compared to the previous quarter, said NBG.
An IIP is a financial statement that explains the value and composition of a country’s external financial assets and liabilities. A positive IIP value indicates a nation is a creditor nation, while a negative value indicates it is a debtor nation, as is the case for Georgia.
Meanwhile, other data on the country’s balance of payments indicated how much money entered and left the country. The NBG said Georgia’s current account deficit of balance of payment was $365.5mn.
The trade of goods and income account make a negative contribution to current account, while the services account and current transfers a positive contribution, the central bank said.
In the first quarter of 2021, the current account deficit decreased by 13.8% annually and the current account deficit ratio to GDP from -11.2% to -10.7%.
Georgia’s public debt metrics deteriorated more than envisaged during the 2020. Due to the economic decline in 2020-2021, tax revenues collapsed and the budget deficit increased to 9.1% of GDP in 2020 (from 1.8% of GDP in 2019), and it is not going to decrease to anywhere below 7.6% in 2021 according to Minister of Finance Ivane Machavariani.
The government debt, which also increased along with the expanded budget deficit, is set to go beyond the 60% margin in 2021. In this context, it is relevant to mention that the government is planning to roll over its $500mn eurobond in 2021, to preserve international reserves. Repaying the eurobond from government deposits rather than refinancing it would reduce the 2021 debt ratio by 2.8pp of GDP.
38 GEORGIA Country Report November 2021 www.intellinews.com