Page 13 - GEORptJun18

European Parliament approves €45mn in macroeconomic support for Georgia
compared to exports of just $961.4mn.
The European Parliament on March 15 endorsed a proposal by the European Commission to provide €45mn in macroeconomic assistance to Georgia as part of its assistance for the period 2017-2020. The support comprises of €35mn in medium-term loans and €10mn in grants.
In a statement, the office of the Eastern Partnership and Russia Unit at the European Parliament noted that Georgia's macroeconomic outlook remains worrisome, despite recent improvements. Thus, the country's debt-to-GDP ratio is on the rise due to the sharp depreciation of the local currency, the balance of payments remains fragile due to the high current account deficits that the import-dependent country runs, and the external environment remains weak.
In the same statement, the European Parliament praised the supervisory activities of the Georgian central bank, which, it says, "have warranted that the financial system remains sound and well capitalised overall".
The support will be disbursed in two tranches and is contingent upon Georgia's performance in the areas of democracy, rule of law, human rights, and good governance, the statement concluded.
3.2 Macro outlook
IMF economic outlook for South Caucasus: Azerbaijan’s growth prospects revised up to 2%
The International Monetary Fund (IMF) has revised its growth projection for Azerbaijan in 2018 up from 1.3% to 2% in its latest economic outlook published on April 17. The development is part of a wider trend of better than previously expected economic performance across the South Caucasus, Central Asia and Russia.
The oil and gas-dependent Azerbaijani economy has begun to recover after its 3.8% y/y contraction in 2016, prompted by low oil and gas prices. In 2017, the economy expanded by a modest 0.1% y/y, but growth is expected to accelerate to 3.9% y/y in 2019, when a new gas exploration and export project comes on line. In the first quarter of 2018, the economy grew by 2.3% y/y, according to data released by the country's national statistics agency on April 17.
Concurrently, Azerbaijan's consumer price inflation is projected to come down from 13% in 2017 to 7% in 2018 and 6% in 2019, according to the IMF. The
13 GEORGIA Country Report June 2018 www.intellinews.com