Page 21 - GEORptMay21

IMF wraps up Georgia EFF programme and set to disburse $111mn
The executive board of the International Monetary Fund (IMF) on a lapse of time basis has completed the eighth and final review under a lengthened four-year arrangement under the Extended Fund Facility (EFF) in Georgia and is set to release special drawing rights (SDR) 78mn ($111mn), bringing total disbursements under the programme to SDR484mn ($687mn).
“After successfully navigating the second wave of COVID-19 and commencing vaccinations, Georgia is at a potential turning point in overcoming the fallout of the pandemic,” the executive board reported, on a rather optimistic note.
The Fund said Georgia must now “bring COVID-19 under control, secure the recovery, and maintain macroeconomic policy discipline in a challenging environment.”
Unlike financial resources during the past year, medical resources, most particularly vaccines, seem, rather scarce in Georgia. Mass vaccination in the country is expected to begin in July, provided the country manages to place sufficient amounts of doses in stock. That makes it unlikely that Georgia's recovery will apply to its key tourism industry this year.
Under the Fund's baseline scenario, a strong recovery is expected to commence in the second quarter of 2021 and GDP is expected to expand by 3.5% for the year. The current account deficit will, however, improve moderately from -12.3% of GDP in 2020 to -10.9% of GDP this year. Only next year, when the country’s GDP is expected to accelerate to 5.8% growth, will the current account gap shrink more significantly, declining to -7.9% of GDP, which is still some 2pp below the pre-crisis level (just under -6% of GDP on average in 2018-2019).
The IMF said Georgia’s 2021 budget appropriately provides additional targeted support for vulnerable households and businesses to help them cope with the pandemic. The deficit is seen at 7.4% of GDP, down from 9.2% of GDP in 2020. Nonetheless, public debt is not set to rise much - only by 0.8% of GDP through 2021 to 60.8% of GDP at the end of this year, as the government accumulated a significant amount of reserves last year. The country’s public debt to GDP ratio leapt by some 16pp in 2020.
The European Union (EU) and the World Health Organization (WHO) Regional Office for Europe will draw on a €40mn budget in a three-year effort at supporting the deployment of coronavirus (COVID-19) vaccines and vaccination in the six EU Eastern Partnership countries: Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.
The project, funded by the EU and implemented by the Regional Office, will cover all phases—constituting “end-to-end” support—of COVID-19 vaccine deployment and vaccination, the two organisations said on February 11. “It will also serve as a major investment to strengthen routine immunization systems in the six countries,” they said in an announcement.
The project amounts to the largest EU and WHO joint action ever implemented in the European Region.
Hans Henri P. Kluge, WHO regional director for Europe, said: “Successful vaccination requires much more than vaccine development and dissemination. This comprehensive ‘end-to-end’ initiative, generously supported by the European Union, will allow the WHO Regional Office for Europe to ensure that
EU and WHO in
€40mn effort to assist Eastern Partnership countries with COVID-19 vaccines
21 GEORGIA Country Report May 2021 www.intellinews.com