Georgia and the International Monetary Fund on Wednesday agreed a three-year programme worth $285 million to underpin economic reforms and encourage investors, an IMF official said.
“The IMF team reached a staff-level agreement with the Georgian authorities – a three-year Extended Fund Facility (EFF) in the amount of $285 million,” Mercedes Vera-Martin, the head of the IMF’s mission to Georgia, told a news conference.
She said that the agreement was subject to approval by the IMF Executive Board in April.
The central bank governor, Koba Gvenetadze, said the funds would be used to boost the country’s currency reserves, which rose to $2.797 billion as of Feb. 1 from $2.757 billion a month earlier and from $2.448 billion a year ago.
In 2014, the IMF approved a three-year stand-by deal for Georgia worth about $136 million, but only 80 percent of those funds were disbursed and the last two reviews were not completed due to disagreements over fiscal sustainability and banking supervision. Part of these disagreements have been resolved.
Vera-Martin said economic growth over the medium term was expected to pick up, supported by structural reforms aimed at preserving macroeconomic and financial stability and addressing structural weaknesses.
She said the Washington-based IMF was not going to revise its growth projection upwards on the basis of one month, but might do so if the positive trend continued.
Georgia’s growth accelerated to 5.2 percent year-on-year in January 2017 from 0.8 percent a year ago, the National Statistics Service said on Tuesday, helped by a rise in exports and remittances.
“Our current growth projection is 3.5 percent for 2017,” Vera-Martin told Reuters. “If the trend continues over the medium term and we think there is a need to revise our growth projection, we will do it.”
She said the government needed to address weaknesses such as high underemployment, a narrow production base, inequality between rural and urban areas and the country’s export capacity.
Vera-Martin added the government had pledged to continue fiscal consolidation, implement monetary policy focused on price stability and strengthen banking regulation and supervision.