Page 29 - GEORptDec20

Georgia drafts crisis plan with focus on supporting residential real estate
COVID-19 pandemic. We also believe that the agreed reforms related to this special assistance will contribute to the long-term perspective of Georgia's further approximation to European standards and will be of particular benefit to Georgian citizens in areas such as justice, occupational safety and pensions,” noted the EU Ambassador to Tbilisi Carl Hartzel.
Prime Minister of Georgia Giorgi Gakharia unveiled a fourth anti-pandemic impact crisis plan. Worth Georgian lari (GEL) 434mn ($135mn), it is aimed at supporting the construction and development sector of the country, particularly the residential segment.
The plan has been criticised for utilising public money to support already profitable businesses, thus not addressing the needs of low-income population segments. The previous plans referred to the tourism, agriculture and education sectors.
The plan will have four dimensions: subsidies for mortgage loan interest rates; state guarantees for mortgage loans; purchasing of apartments for internally displaced persons (IDP); and a guarantee extended to developers for the purchase of a certain share (30%) of their project, unless the developer manages to sell the apartments on the market.
The largest part of the budget will go to the purchase of apartments for IDP: GEL150mn plus another GEL200mn under the fourth dimension of the programme, amounting to GEL350mn or more than 80% of the budget total. The maximum price the government will pay under each of the two instruments (firm purchase or a purchase following the guarantee arrangement) is GEL1,700 ($530)per square metre.
GEL70mn will be used to pay a 4% subsidy on the interest paid by debtors under mortgage contracts. It is expected GEL14mn will go on the government paying to guarantee 20% of the value of mortgage loans. The subsidy and guarantees will apply only to those mortgage contracts signed in the second half of this year. They will be extended over a period of five years.
6.2 ​Debt
Georgia - Gross external debt
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
Gross external debt ($ mn)
17,319 17,809 17,461 17,299 17,812 17,822 18,232 17,902 18,631 18,282
2011 2012 2013 2014 2015 2016 2017 2018 2019
Gross external debt (% GDP)
81.2 84.6 83.2 84.7 109.4 110.7 106.4 101.3 105.4
source: CEIC, World Bank
Georgia's public external debt up by 3.1% of GDP in July
Georgia's public external debt increased by Georgian lari (GEL) 1.49bn (nearly $500mn and equivalent to 3.1% of GDP) in July.
According to the Georgian finance ministry, the total such debt at the end of July amounted to GEL20.26bn ($6.59bn, 41% of GDP), while in June the figure was GEL18.77bn. Of the total public external debt at the end of July, the
29​ GEORGIA Country Report ​December 2020 ​ ​www.intellinews.com