Page 29 - GEOGRptJun19

checks. Smuggling and use of raw tobacco would significantly affect the government’s budget, the lawmaker noted.
Cigarette prices increased by an average of 50 tetri ($0.19/€0.16) in Georgia following amendments to the tax code that came into play on January 1.
6.2 Debt
Georgia - Gross external debt
3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
Gross external debt ($ mn)
15,697 15,872 16,042 16,660 16,881 17,250 17,759 17,416 17,225 17,800
2011 2012 2013 2014 2015 2016 2017 2018
Gross external debt (% GDP)
81.1 84.6 83.2 84.6 109.0 110.4 114.4 109.6
source: CEIC, World Bank
The gross external debt of Georgia amounted to $17.8bn as of end-December 2018, rising from 17.2bn in the third quarter of 2018. External debt averaged $11,420.4mn from 2007-2017, according to the National Bank of Georgia. It accounted for 109.6% of GDP. Gross external debt include both public sector (general government, public corporations and national bank) and private sector (banking and other sectors) external debt.
Georgia’s government debt is expected to inflate to 3.5% of GDP in 2017-2019, in part due to the depreciation of the Georgian lari and the high level of dollarisation of Georgia's external debt. External government debt is expected to peak at 43% of GDP in 2018.
The country's high current account deficit, which reached 13% of GDP at end-2016, is one of the important sources of external debt.
7.0 FX
Georgia - Foreign exchange rate
2012
2013
2014
2015
2016
2017
2018 Q1
2018 Q2
2018 Q3
2018 Q4
Currency (units per EUR) (average)
2.123
2.209
2.346
2.520
2.617
2.832
3.054
2.918
2.940
3.054
Currency (units per USD) (average)
1.651
1.663
1.766
2.270
2.367
2.509
2.485
2.446
2.529
2.675
Georgia’s central bank attempts to smooth exchange rate “volatility”
Recent exchange rate fluctuations in the Georgian lari are not related to economic fundamentals, Georgia’s central bank stated in a note on November 6, in an attempt at moderating depreciation that has accelerated recently.
While the country’s chronic current account deficit is safely financed by wage remittances and the central bank’s reserves are actually increasing, vulnerabilities make the exchange rate of the lari particularly sensitive to political developments—the outcome of the presidential election which has
29 GEORGIA Country Report June 2019 www.intellinews.com