Page 21 - GEORptMay20

Georgia reaches staff level agreement on IMF financing
"Besides [this financing], the private sector is providing another $1.5bn. The same donor organisations are ready to assist the private sector of Georgia if help is needed. This enables us to start real work on a post [pandemic] crisis economic recovery plan together with our economic team and our international donor organisations. I am sure Georgia will be able to attract more financial resources", the PM said.
An International Monetary Fund (IMF) team headed by Mercedes Vera Martin completed discussions in Tbilisi on April 13 on the Sixth Review and on the augmentation of access under the Extended Fund Facility (EFF), reaching a staff-level agreement on a financing tranche of $200mn under the EFF plus $375mn of proposed financing augmentation—both subject to Fund executive board approval in early May.
“Following productive discussions, the Georgian authorities and the IMF team reached a staff-level agreement on the conclusion of the Sixth Review of the EFF arrangement,” the Fund’s subsequent press release read.
In addition to approving the $200mn tranche under the EFF, the team will recommend an increase in IMF support to Georgia by 130% of the quota (around $375mn) to help finance health and macroeconomic stabilisation measures, meet urgent balance of payments needs arising from the coronavirus (COVID-19) pandemic and catalyse support from the international community.
The disbursement associated with this review (the $200mn) will be allocated for budget support to help the authorities meet urgent medical and socio-economic needs, to be disbursed with the completion of this review. With the financing available to Georgia upon completion of the review (not including the $375mn augmentation, but the tranches under the EFF), total disbursements under the EFF arrangement will amount to 155% of the quota (at around $450mn).
As regards the macroeconomic outlook for the country, the forecast provided by the expert IMF team that wrapped up its two-week visit to Georgia is slightly worse than that included in the World Economic Outlook (WEO). Namely, the IMF says that the current account gap for 2020 will widen to 11.3% of GDP (versus 10.5% of GDP included in the WEO). This is a key indicator for Georgia’s economy since the country depends on tourist revenues and remittances for growth.
Separately, the IMF team estimated that the public deficit will be 8.5% of GDP. The fiscal deficit is expected to temporarily widen to 8.5% of GDP, as revenues decline and spending rises to contain the virus outbreak and offset the social and economic impact of the pandemic.
The European Bank for Reconstruction and Development (EBRD) is considering awarding ​a​ €40mn loan​ to finance an energy efficiency ("EE") upgrade in Georgia and the rehabilitation of 250 public buildings in the country that would increase their EE.
"The goal of the Project is to contribute to Georgia's green economy transition by introducing comprehensive EE renovations of public buildings, building the
EBRD may award Georgia ​ €40mn​ for green investments in public buildings
Minister Giorgi Gakharia.
21​ GEORGIA Country Report ​May 2020 ​​www.intellinews.com