Page 37 - GEORptJun22

Georgia's public debt overview
Gharibashvili said that Georgia has had “major economic growth this year, which is expected to continue”.
He stated that economic growth in Georgia in October amounted to about 7%, while growth in the past 10 months totaled 10.5%, calling it “unique, unprecedented high growth across Europe, [which] allowed us to increase the budget by more than GEL1.3bn”.
Gharibashvili stated that the total volume of the country's economy next year will be GEL65bn, with a per capita GDP of $5,500.
He stated that the salaries of public servants will increase by 10% in 2022, as well as pension and social assistance for veterans.
The new public debt target for 2022 represents an increase from the early November target of 52.2% of GDP.
Georgia’s public debt metrics deteriorated more than envisaged during the 2020. Due to the economic decline in 2020-2021, tax revenues collapsed and the budget deficit increased to 9.1% of GDP in 2020 (from 1.8% of GDP in 2019), and it is not going to decrease to anywhere below 7.6% in 2021 according to Minister of Finance Ivane Machavariani.
The government debt, which also increased along with the expanded budget deficit, is set to go beyond the 60% margin in 2021. In this context, it is relevant to mention that the government is planning to roll over its $500mn eurobond in 2021, to preserve international reserves. Repaying the eurobond from government deposits rather than refinancing it would reduce the 2021 debt ratio by 2.8pp of GDP.
The largest creditors of the state of Georgia are Asian Development Bank (ADB), World Bank International Development Association (IDA), European Investment Bank (EIB) and International Bank for Reconstruction and Development (IBRD).
The debt owed to IDA is GEL2.85bn ($935mn), the ADB debt stands at GEL4.36bn ($1.43bn) and the EIB debt is GEL1.88bn ($620mn). Gross external debt include both public sector (general government, public corporations and national bank) and private sector (banking and other sectors) external debt.
37 GEORGIA Country Report June 2022 www.intellinews.com