Georgia’s State Debt Ratio in GDP to Exceed 60% by Consent of IMF
The Government of Georgia and the International Monetary Fund (IMF) have achieved agreement to expand Georgia’s borrowing limits in response to the current economic crisis.
Under the agreement, Georgia’s state debts in GDP will exceed 60%. The indebtedness ratio in GDP must be lowered below 60% in 2023.
According to the IMF estimations, at this stage, Georgia’s state debts in GDP accounts for 58.65%. The Government of Georgia and the IMF conducted negotiations on November 5-9. Under the agreement, the Georgian Government plans the budget deficit at 7.6% instead of 5.1%.
"The 2021 budget deficit is determined by 6.7% as a result of higher healthcare costs and households and business support measures in order to recover economic processes amid the growing unclearness. The IMF mission welcomes the Government’s efforts to maintain fiscal stability in the midterm period, in compliance with Georgia’s “fiscal regulations”, under which the fiscal deficit in GDP will be 3% and state debt must be below 60% in GDP”, the IMF statement reads. According to the 2021 initial budget bill, the Government plans to spend GEL 17.07 billion, however, this document does not reflect the allocations for the COVID-19 crisis.
These costs will be reflected in the final document. A detailed parameter of the new debt will be unveiled on November 30, when the Finance Minster will introduce the revised budget bill. We remind you that in 2020 the Georgian Government took new foreign debts of GEL 6.2 billion and domestic debt of GEL 1.85 billion. As a result, the budget deficit recorded a historical high of 8.4%.