Tao Zhang, deputy managing director within the IMF
The Executive Board from the International Monetary Fund (IMF) approved a three-year extended arrangement in the Extended Fund Facility (EFF) for Georgia with an amount of SDR 210.4 million (about $285.3 million or Total of quota) to guide the authorities\’ economic reform program.
The EFF-supported program will assist Georgia reduce economic vulnerabilities, pursue well-coordinated policies, and promote economic growth. This course includes ambitious structural reforms to get higher and even more inclusive growth, working on: improving education; buying infrastructure; making people administration more streamlined; and improving further the company environment to further improve the private sector as the growth engine.
The Executive Board\’s approval permits an immediate disbursement of SDR30 million (or about US$40.7 million). The remainder of the amount shall be phased in the period of this course, controlled by six semi-annual reviews.
Following the Executive Board discussion, Mr Tao Zhang, Deputy Managing Director and Acting Chair, said:
“The Georgian authorities have adopted an economic program geared towards promoting growth whilst macroeconomic stability. Georgia faces several economic challenges, with a narrow production base, external and fiscal imbalances, and subdued economic growth rich in unemployment. This continues to be exacerbated by low boost in major trading partners largely brought on by lower oil prices. The authorities\’ program maintained by the Extended Fund Facility will assist address these challenges by lessening fiscal deficits while shifting public spending toward investment, accelerating structural reforms, strengthening the monetary policy framework, and enhancing financial sector supervision, safety nets, and bank resolution frameworks.
\”The central bank will keep to bolster its capability to meet inflation targets. As you move the financial sector has demonstrated resilience to depreciation, the central bank is introducing macroprudential instruments to handle currency mismatches, concentration risks, and systemically important banks. The authorities have likewise announced a thorough group of de-dollarization measures. The development of deposit insurance might help strengthen the financial back-up.
\”Fiscal policy will make an effort to decrease the deficit gradually through measures to boost revenue and cut current expenditures, while spending on infrastructure investment will rise, supporting growth. Efforts are going to be created to increase efficiency in public healthcare while keeping adequate healthcare coverage, designed for essentially the most vulnerable. Control and disclosure of fiscal risks are increasingly being strengthened.
\”Structural reforms are critical for the achievements of this course, enabling higher inclusive growth and economic diversification. The reform effort will focus on capital market development, pension reform, a PPP framework, public financial management, private sector governance and competition, and education reform.
\”Risks to program implementation are significant, but should really be mitigated via the authorities\’ determined persistence to the insurance policy package and the broad political support to the program.\”
- The approval allows for a quick disbursement of SDR30 million (or about US$40.7 million)
- The program should help Georgia\’s ambitious structural reforms to come up with higher and more inclusive growth, concentrating on: improving education; committing to road infrastructure; making the population administration more streamlined.
- Fiscal consolidation covering the medium term aims to anchor public debt to the level and shifting spending toward capital investment to address infrastructure bottlenecks.