Page 35 - GEORptJul18

According to the ministry's statement, the "revision of the outlook to positive reflects the key rating drivers such as maintaining a stable macroeconomic environment, showing resistance to shocks and ensuring a favourable business environment". Georgia’s growth prospects compare favourably in the ‘BB’-rated peer group, where the median five-year average growth is estimated at 3.5%. Under Fitch’s latest projections, Georgia is set to achieve real GDP growth of 4.6% in 2018 and 4.9% in 2019".
However, Fitch has warned repeatedly about Georgia's foreign debt, which accounted for 66% of GDP in mid-2017 and which comprises primarily (84%) of concessional and multilateral loans that are denominated in foreign currencies, exposing the government to exchange rate volatility.
Furthermore, the country's current account deficit stood at 13.5% of GDP in 2016, up from 12% in 2015, driven by a worsening of the primary income deficit. Lastly, Georgia's foreign exchange reserves are relatively low, covering only three months of imports.
8.5 Fixed income
8.5.1 Fixed income - bond news
Microfinance institution Crystal’s bonds admitted to Georgian Stock Exchange
Kutaisi-based microfinance organisation JSC MFO Crystal’s GEL10mn (€3.5mn) two-year bonds were admitted to the Georgian Stock Exchange on May 17.
Crystal made its debut bond issue in December 2017, which was the first local currency bond offering in Georgia’s microfinance sector. The firm said at the time of the issue that it planned to list the bonds on the local exchange.
The bonds, which mature on December 28, 2019, have been admitted to the exchange’s category B listing under the ticker #CRS01J , the Georgian Stock Exchange a nnounced .
Crystal’s main focus is on micro entrepreneurs and farmers living and working in regions and remote areas, with just under 29% of its portfolio extended to borrowers outside urban areas as of 2017. It has 50 regional branches across eight Georgian regions. As of 2017 its loan portfolio amounted to around GEL150mn.
It offers a range of financial services to micro, small and medium sized enterprises (SMEs), loans to the agricultural sector, housing and consumption loans, as well as currency exchange services, remittance handling and other financial services such as utility payments.
35 GEORGIA Country Report July 2018 www.intellinews.com