Page 44 - GEORptAug20

8.4 ​International ratings
Georgia - Rating agency
as of May 2020
Bond rating: Moody’s
Ba2 (Stable)
Bond rating: Fitch
BB (Negative)
Bond rating: S&P
BB (Stable)
Fitch revises Georgia’s sovereign outlook to negative ‘BB’
Fitch Ratings has​announced​a revision of its outlook on Georgia’s long-term foreign-currency issuer default rating (IDR) to negative from stable and has affirmed the IDR at BB to reflect the evolving impact of the coronavirus (COVID-19) pandemic on the country.
“This significant shock will lead to a sharp contraction of Georgia's small and open economy with a high dependence on tourism, deterioration in fiscal accounts including markedly higher public debt and increased risk stemming from Georgia's higher external debt and wider structural current account deficit relative to the median of its BB category peers,” Fitch commented.
Georgia’s GDP growth is forecast by Fitch to contract by 4.8% in 2020. The rating agency also projects that GDP growth will partially recover in 2021 to 4.3%, supported by a rebound in external demand, a revival of private consumption, employment growth and a recovery in investment.
“However, there are material downside risks to our forecasts given the uncertainty around the extent and duration of the coronavirus outbreak,” Fitch said.
Fitch forecast that the general government deficit would rise to 8.6% of GDP in 2020, from a deficit of 2.0% in 2019, reflecting the government's fiscal support measures, automatic stabilisers and the impact on revenue of the contraction in the economy.
Georgia's announced fiscal package in response to COVID-19 amounted to Georgian lari (GEL) 2bn (approximately 4.0% of GDP) as of April 23, Fitch’s report said. However, the government unveiled on April 24 a bigger, GEL3.5bn
44​ GEORGIA Country Report ​August 2020 ​ ​www.intellinews.com